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Yahoo! Inc. (YHOO) Message Board

  • onedge953 onedge953 Jul 21, 2010 12:30 PM Flag

    Hopeless

    Yahoo Shares Fall On Weak Revenue Trends, Turnaround Concerns

    Last Update: 7/21/2010 12:26:40 PM



    By Shara Tibken
    Of DOW JONES NEWSWIRES


    NEW YORK (Dow Jones)--Shares of Yahoo Inc. (YHOO) took a hit Wednesday as
    investors expressed displeasure with the Internet giant's weak second-quarter
    revenue and guidance and worried the company's long-running turnaround effort
    still isn't having much impact.

    Late Tuesday, Yahoo said its second-quarter earnings jumped 51%, but overall
    revenue fell short of expectations as the company was hurt by an unexpected
    pullback by some advertisers in display advertising during the latter part of
    June.

    While the company has improved profitability by cutting costs and making other
    changes, concerns still abound, with investors worrying the actions aren't
    enough.

    "Investors have been waiting for years for Yahoo to find some way to unlock value
    from its global Internet operations," Benchmark analyst Clayton Moran said.
    Investors to some extent have lost patience with Yahoo's efforts and want to see
    more dramatic change, he said.

    "I also think investors are maybe coming to the conclusion this is a ship that
    can't be righted," Moran said.

    In recent trading, Yahoo shares dropped 8% to $13.03, down more than 20% over the
    past three months.

    Since Chief Executive Carol Bartz took Yahoo's helm at the beginning of last
    year, she has sloughed off noncore businesses and kept focus on only a few key
    operations. In the most-recent period, Yahoo announced multiple partnerships and
    takeovers that pushed it further into content generation, social-networking games
    and the mobile-phone market. The board also approved a $3 billion share buyback,
    representing about 15% of the company.

    Late Tuesday, Yahoo posted a profit of $213.3 million, or 15 cents a share, up
    from $141.4 million, or 10 cents a share, a year earlier. Analysts surveyed by
    Thomson Reuters predicted 14 cents.

    Total revenue rose 1.8% to $1.6 billion, the low end of April's forecast, as
    revenue excluding traffic-acquisition costs--commissions paid to marketing
    partners--slipped 0.7% to $1.13 billion.

    Yahoo also projected revenue for the third quarter of $1.57 billion to $1.65
    billion, the midpoint of which is below the average analyst forecast of $1.64
    billion.

    While investors were disappointed in the results, analysts said several things
    are going right for Yahoo, such as its display-advertising growth and improving
    margins.

    Still, Citi analyst Mark Mahaney cut his rating on Yahoo to hold, saying he's
    concerned Yahoo's "shareholder friendly" actions aren't enough to make up for
    "so-so" revenue trends and other factors.

    And Jefferies analyst Youssef Squali said Yahoo "remains cheap and management is
    doing many of the things needed to fix the company, but it will require patience
    for the stock to work in the end."

    -By Shara Tibken, Dow Jones Newswires; 212-416-2189; shara.tibken@dowjones.com

    (Scott Morrison and Amir Efrati contributed to this report.)

    (END) Dow Jones Newswires

    July 21, 2010 12:26 ET (16:26 GMT)

 
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