• by Mark Walsh  @markfwal, April 20, 2009

Yahoo Tuesday will report first-quarter earnings, providing the first glimpse of the embattled Web portal's progress under CEO Carol Bartz, who replaced Jerry Yang in mid-January.

The new chief executive hasn't improved the financial picture for Yahoo, but analysts seem inclined to give her more than two-and-a-half months to turn the company around. The consensus estimates for the first quarter are net revenue of $1.2 billion, EBIDTA (adjusted earnings) of $398 million, and earnings-per-share of 8 cents.

Those figures represent revenue growth dropping for the second straight quarter -- down 11% from $.135 a year ago -- EBIDTA margins falling about 300%, and earnings-per-share sliding from 11 cents in the year-earlier period.

As a result of the economic downturn, both Yahoo's display and search ad revenues were expected to take a hit during the quarter. Estimates call for a 17% decline in display advertising and a 1% dip in search. The more recession-proof search business had been a bright spot for Yahoo in the fourth quarter, growing 11%, and helping to offset declining display ad dollars.

Against that grim background, Yahoo's shares have recently risen on reports that the company has renewed talks with Microsoft about a search and advertising partnership. One option could possibly involve Microsoft selling search ads for Yahoo, while Yahoo sells display ads on Microsoft's online properties.

Neither company has publicly confirmed the talks, so analysts will be eager to learn more about the topic during Yahoo's earnings conference call. That doesn't mean they necessarily expect an imminent deal. "We believe a major search deal is very unlikely in the near-term," wrote Citi analyst Mark Mahaney, in a recent report. "We think Yahoo management, having only recently settled on its organizational strategy, is still far from having determined its corporate strategy."

Indeed, Bartz has already taken steps to streamline Yahoo's management structure and reduce costs. Recent reports have suggested the company is planning additional cutbacks follow the layoffs of 1,500 employees in December, with an announcement on the cuts coming as early as Tuesday.

Analysts also expect to hear from Bartz about the company's search for a new chief financial officer following the departure of former CFO Blake Jorgensen earlier this year. His exit followed those of former Yahoo President Sue Decker and Yang, completing a purging of the company's top officers in connection with Bartz's arrival.