Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nasdaq  >  Yahoo !    

YAHOO !
Mes dernières consult.
Most popular
Report
SummaryChartsNewsAnalysisCalendarCompanyFinancialsConsensus 
News SummaryMost relevantAll newsSector newsTweets

YAHOO! : Yahoo outlook misses, shares slip

share with twitter share with LinkedIn share with facebook
share via e-mail
0
07/22/2009 | 03:45am CET
A Yahoo! sign is seen in New York's Times Square

Yahoo Inc's third-quarter forecasts fell short of Wall Street expectations, sending shares 3.2 percent lower, as the Internet company announced plans to step up spending despite persistent weakness in the advertising market.

By Alexei Oreskovic

Chief Executive Carol Bartz said Yahoo was hiring more engineers and sales and marketing staff as it invests in new products and branding -- a reversal from the cost cuts the company embarked upon in past months.

Bartz, on a conference call, said the company was committed to bolstering its profit margins in the long run. But in the near term, she said, "there are things we've got to get done and a lot we don't control in this economic climate."

Bartz did not address reports that discussions about a search and advertising partnership with Microsoft Corp were gaining steam. But she described Microsoft's new search engine, Bing, as a "good product" that improves experimentation around search and she said she believed there were clear benefits in the search business to being large.

"The noises were all encouraging," Sanford Bernstein analyst Jeff Lindsay said regarding a potential deal with Microsoft. "If there wasn't some basis to these discussions, she would have been far more negative" about Bing.

Yahoo is the second-largest Internet search engine in the United States with a 19.6 percent market share in June, according to comScore, while Microsoft occupies the No. 3 spot with 8.4 percent share.

Some analysts and investors believe the two companies need to team up to better compete with Google Inc, which has a 65 percent share of the U.S. search market.

SPEND, SPEND, SPEND

Yahoo forecast revenue for the current quarter of $1.45 billion to $1.55 billion, while pegging traffic acquisition costs -- the portion of revenue that Yahoo pays its partners -- at 26 percent of revenue.

That suggests net revenue of $1.07 billion to $1.15 billion, by Reuters calculations, below the $1.17 billion expected by analysts, according to Reuters Estimates.

Bartz said Yahoo expects to lose about $75 million in revenue from its "quarterly base-line" as a result of an initiative to eliminate "disruptive" ads the company feels irks its users.

Then, Yahoo plans to spend an additional $75 million in the third quarter on a new marketing campaign and product improvements.

Cowen & Co analyst Jim Friedland said investors had expected Yahoo to invest in the business following the cost cuts, but he said the amount of the increase was greater than anticipated.

He said the value of high-profile marketing campaigns is unproven for Web companies. "There's frankly not a lot of history of success in spending on branded campaigns in the Internet space," he said.

Yahoo reported its financial results on the same day it introduced a major redesign of its homepage. The company hopes the move will make it more relevant to users increasingly turning to social networking sites like Facebook and Twitter.

It also announced a deal with AT&T Interactive on Tuesday in which AT&T's sales force will sell display ad space on Yahoo to local businesses.

Bartz said the company was seeing less fear in the marketplace.

But the slump in ad spending continues to weigh on its results.

Yahoo said display advertising revenue fell 14 percent year-over-year in the second quarter, while search advertising revenue declined 15 percent.

Total revenue dropped 13 percent to $1.57 billion from a year ago as advertisers remained tight-fisted.

Excluding traffic acquisition costs, Yahoo booked net revenue of $1.14 billion, in line with the average of analysts' expectations, according to Reuters Estimates.

Revenue from search advertising fell 15 percent from the year-ago quarter, while display ad revenue fell 14 percent.

"We're in challenging times in all of the sectors within advertising, including online," said Ross Sandler, an analyst at RBC Capital markets. "These guys are being disproportionately hit by overexposure to premium display, which has been an area that has been especially weak."

Yahoo posted net income of $141 million, or 10 cents a share, versus $131.2 million, or 9 cents a share, a year ago. Analysts, on average, were looking for 8 cents a share.

For the current quarter, Yahoo forecast income from operations of $55 million to $65 million, down from $76 million in the second quarter.

The company forecast operating cash flow of $330 million to $370 million, compared with the average analyst forecast of $413.5 million, according to Reuters Estimates.

Shares of Yahoo fell 54 cents from their $16.75 Nasdaq close after the company posted its results.

(Reporting by Alexei Oreskovic and Anupreeta Das; Additional reporting by Laura Isensee in Los Angeles; Editing by Gary Hill)

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on YAHOO !
11/08 ALTABA : Former Yahoo CEO says no company or agency immune from hacks
11/08DJMARISSA MAYER : Senate Committee Subpoenaed Former Yahoo CEO Marissa Mayer
11/03DJALTABA : U.S. Mulls Charges for Russians in DNC Hack -- WSJ
11/02DJALTABA : Prosecutors Consider Bringing Charges in DNC Hacking Case
10/25DJTRONC : L.A. Times Chief Plots Change -- WSJ
10/25 Yahoo’s new name Altaba sounds a lot like Alibaba for a reason
10/19DJVERIZON COMMUNICATIONS : Continues to Win Wireless Subscribers
10/17DJAMAZON COM : Cloudflare, Crowdstrike CEOs Spar Over Future of Cybersecurity Busi..
10/12DJCybersecurity Tops Priority List For CEOs After String of High-Profile Hacks
10/05DJVERIZON COMMUNICATIONS : Media Chief To Leave -- WSJ
More news
News from SeekingAlpha
06/15 Verizon to take $500M charge on integration of Yahoo
06/15 Yahoo sets pricing for $3B self-tender buyback
06/14 Yahoo Now Oath, Shareholders Look Forward To AABA
06/13 Yahoo era ends as Verizon closes $4.48B buyout
06/13 3 Reasons For Market Selloff - Cramer's Mad Money (6/12/17)
Chart YAHOO !
Duration : Period :
Yahoo ! Technical Analysis Chart | US9843321061 | 4-Traders
Technical analysis trends YAHOO !
Short TermMid-TermLong Term
TrendsNeutralBullishBullish
Income Statement Evolution
Consensus
 
Mean consensus OUTPERFORM
Number of Analysts 1
Average target price 65,0 $
Spread / Average Target -10%
Managers
NameTitle
Thomas J. McInerney Chief Executive Officer & Director
Eric K. Brandt Non-Executive Chairman
Alexi A. Wellman Chief Financial & Accounting Officer
Catherine J. Friedman Independent Director
Tor R. Braham Independent Director
Sector and Competitors