Yahoo (YHOO) Reports Better Earnings, Lower Revenues
Shares of Yahoo Inc. (YHOO) closed down -0.19 or -0.79 percent to $23.79 per share on Tuesday, ahead of the company's 2013 first quarter earnings report. Yahoo stock sold off after the announcement and was trading down -1.15 or -4.83 percent in Wednesday's pre-market trading session. For the first quarter of 2013, Yahoo reported earnings of $0.38 per share excluding some items, versus $0.24 per share in the same period one year ago.
Revenue stayed flat at $1.074 billion, versus $1.077 billion in 2012's first quarter. Analyst consensus for earnings was for $0.24 per share on revenue of $1.1 billion, according to Thompson Reuters. Daily Chart
Founded by two Stanford engineering students in 1995, Sunnyvale, California based Yahoo! Inc. is a multinational Internet company best known for its web portal and search engine. The company also runs a plethora of related web services that include: Yahoo! Mail, Yahoo! Finance, Yahoo! Directory and Yahoo! Groups to name only a few. The company derives most of its revenue from advertising and according to some sources over 700 million people visit its websites in over 30 different languages every month. Yahoo! has been struggling recently, having lost considerable traffic to competition from Google (GOOG
) and social media sites like Facebook (FB
). The company has had four CEOs in the last five years, with Marissa Meyer, a former Google executive coming on board in July of 2012. While total ad revenue for the first quarter dropped three percent, the big disappointment for analysts was Yahoo!'s display advertising revenue, which declined by eleven percent from the previous year to $402 million. The drop suggests that the company is losing market share to other search engines. Nevertheless, ad revenue from ads running with search results grew by six percent versus the previous year. Despite the disappointment in revenues, Yahoo! earnings came in 36 percent higher than the previous quarter. The increase was in part from the company's many investments in other Internet and related businesses, which brought in $216 million in 2013's first quarter. After the earnings release, CEO Marissa Mayer stated that, "I'd like to see us grow search click volume more by making the search experience more immersive - we'll be working on that in the coming quarters," ... more intuitive experiences for our users," also that, "We are moving quickly to roll out beautifully designed, more intuitive experiences for our users," "I'm confident that the improvements we're making to our products will set up the company for long-term growth." After four years of consecutive yearly losses, Yahoo! turned around last year, making a yearly profit of two percent. While the number is low, the company's stock price has increased 37 percent from $15.01 per share, where it closed on April 17th of 2012. If CEO Mayer can continue making solid investments for the company - such as the 24 percent stake in Chinese Internet company Alibaba - and make a turn around on its display ad revenues, Yahoo! could regain its position as a major Internet powerhouse. Other News About YHOO Teenager in Need of 18m? There's a Yahoo App For That
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Published on Apr 17, 2013
By Jay Hawk