updated 1/27/2009 8:21:33 PM ET 2009-01-28T01:21:33

Yahoo Inc. stumbled to a fourth-quarter loss of $303 million, but the Internet company withstood the recession better than analysts had expected.

The results that were released Tuesday closed the books on Yahoo co-founder Jerry Yang’s fruitless 18-month stint as CEO. The Sunnyvale, Calif.-based company hired a new leader, Carol Bartz, two weeks ago in its latest attempt to orchestrate a turnaround.

Yahoo’s loss translated into 22 cents per share. It compared with a profit of 15 cents per share in the prior year, when Yahoo earned $206 million.

The fourth-quarter setback wasn’t as bad as it appeared because the loss stemmed from charges to cover Yahoo’s costs for laying off 1,500 employees last month and to account for bad investments.

If not for those charges of nearly $600 million, Yahoo said it would have earned 17 cents per share — a figure that would have improved upon the prior year’s results, a rarity during the company’s three-year slump. And it beat the estimate for 13 cents per share by analysts surveyed by Thomson Reuters. The analysts didn’t include the one-time charges in their forecasts.

Revenue for the period dipped 1 percent to $1.81 billion. After subtracting the company’s advertising commissions, Yahoo’s revenue totaled $1.37 billion, matching analyst estimates.

Given the long-running deterioration in Yahoo’s earnings, investors were bracing for another disappointing performance in the fourth quarter as the dismal economy discouraged spending on Internet ads — the company’s main source of revenue.

But Yahoo’s ad revenue of $1.59 billion remained largely unchanged from a year ago.

Investors seemed relieved as Yahoo shares gained 39 cents, or 3.4 percent, in extending trading, after finishing the regular session at $11.34, up 17 cents.

Yahoo’s performance in the quarter wasn’t as impressive as that of Internet ad leader Google Inc., whose fourth-quarter revenue rose 18 percent. Still, the showing suggested the challenges facing Bartz might not be quite as daunting as was widely assumed.

Bartz nevertheless started her reign by giving a cautious outlook. Yahoo predicted its first-quarter revenue will range from $1.53 billion to $1.73 billion, a decline from $1.82 billion at the same time last year. Yahoo didn’t project its earnings for the quarter.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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