-->Yahoo Q4 improves to profit as sales rise 51 pct; tops estimates - UPDATE

(Updating with details, quotes)

SUNNYVALE, CA (AFX) - Yahoo! Inc(NASDAQ-NMS:YHOO) reported a return to profit in the fourth quarter and topped analysts' expectations, turning in earnings of 8 cents a share, improving from a loss of 2 cents a share in the same quarter of last year, as sales gained 51 pct.

Chief financial officer Susan Decker was upbeat on the outlook for the internet company.

"In 2003, we expect strong growth in revenue, profitability and free cash flow even as we continue to invest in areas that we expect will drive long-term growth," Decker said.

Sales for the latest three-month period rose 51 pct to 285.8 mln usd from 188.9 mln a year ago, the internet company said.

Analysts had, on average, anticipated fourth-quarter EPS of 6 cents on sales of 278.6 mln usd, according to a poll by estimates tracker First Call/Thomson Financial.

Yahoo expects first-quarter sales to be 255-275 mln usd and is looking for sales of 1.145-1.215 bln for all of 2003. Those figures compare to an average of analysts' estimates calling for first-quarter sales of 269.75 mln usd and full-year sales of 1.166 bln.

Both EBITDA and free cash flow, two measures the company touts as important indicators of its performance, improved sharply in the latest quarter, Yahoo said.

EBITDA for the fourth quarter improved to 85.3 mln usd or 30 pct of sales from 11.7 mln or 6 pct of sales during the same quarter a year earlier, including a 16.0 mln usd restructuring charge.

Free cash flow improved to 61.4 mln usd from a year-ago loss of 6.4 mln.

Yahoo expects its EBITDA will come in at 60-70 mln usd for the first quarter and 295-330 mln for all of 2003.

The company expects to spend 70-90 mln usd on capital items in 2003.

michael.pai@afxnews.com

mtp/gc


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