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 London teenager sells app to Internet giant. YahooTturnaround Still Confounded by Weak Ad Sales CEO Mayer acknowledges company still faces challenges. Other Stocks in the News Oracle Fixes 42 Holes in Java to Revive Security Confidence Company fixes problems, promotes user confidence. HP Aims to Revolutionize Computers with Motion-Control Technology New technology could change the way we use computers. Copyright 2013 by, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA, Inc.) or its employees responsible.

Published on Apr 17, 2013
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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