Yahoo Expected To Report Flat Sales

(NewsCore) - SAN FRANCISCO -- Yahoo Inc. is expected to post a decline in profit alongside flat sales when it reports first-quarter earnings after the market's close on Tuesday, as the internet company continues to press ahead with an ambitious turnaround effort.

Analysts polled by FactSet Research expect Yahoo to report earnings for the period ended in March of 16 cents a share, and $1.05 billion in net revenue.

That compares to earnings of 22 cents a share, and $1.13 billion in net revenue in the same period a year earlier, when Yahoo's earnings figure was boosted by some seven cents a share, thanks to the sale of its Zimbra email unit and its ongoing search partnership with Microsoft Corp.

Yahoo hired Chief Executive Carol Bartz in January 2009 to oversee a revamp of the embattled internet giant. Bartz has sought to streamline operations and has set a target of reaching a 24 percent operating margin by 2013. Yahoo's operating margin presently stands at roughly 14 percent.

BGC Partners analyst Colin Gillis told clients in a recent research note that while Bartz has now "entered into the third year of her contract, the company is still very much in the process of turning itself around."

Yahoo effectively warned Wall Street away from expecting much significant improvement in the amount of revenue it receives per internet search during its last earnings call, in January.

Yahoo has sealed a partnership with Microsoft that has Microsoft powering Yahoo's search results in a revenue-sharing arrangement. Bartz said in January that the deal has seen "more bumps than expected" as the companies align their operations.

At that time, Yahoo said that it will likely not be until the second half of this year that the partnership will start showing more tangible benefits.

Read more: MarketWatch