Another report on Yahoo reveals statistics that will have positive impact on infrastructure sector at some point:
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Yahoo! blows past Q2 estimates
By Larry Barrett, ZDII
July 7, 1999 6:10 PM ET
Yahoo! Inc. hurdled analysts' estimates in its second quarter Wednesday, returning a profit of $28.2 million, or 11 cents a share, on sales of $115.2 million. Its shares closed off 8 1/16 to 167 1/16 ahead of the earnings report.
First Call consensus expected Yahoo! to earn 8 cents a share in the quarter.
The $115.2 million in sales represents a 156 percent jump compared to the year-ago quarter when it made $1.4 million, or 1 cent a share, on sales of $44.9 million.
The second-quarter results were the first to include its pricey acquisitions of both GeoCites Inc. and Broadcast.com Inc.
More impressive, Yahoo!'s registered user base jumped to 65 million users in the quarter and its average daily page views surged to 310 million in June.
"During the second quarter, we expanded our audience, our extensive global presence, the content and services we offer, the platforms and devices on which they are delivered, and the marketing programs we offer our customers," said CEO Tim Koogle in a prepared release.
Yahoo! shares moved up 1 11/16 in after-hours trading.
In March, Yahoo! reported 235 million average page views.
Including the costs of merging its acquisitions, Yahoo! reported a net loss of $15 million, or 7 cents a share, compared to a net loss of $14.2 million, or 8 cents a share, in the year-ago period.
Absorbing its acquisitions
Most analysts predicted Yahoo! would record sales of between $100 million to $115 million.
Last quarter, it pocketed $25 million, or 11 cents a share, on sales of $86 million. First Call predicted it would earn 8 cents a share in that quarter.
"We believe Yahoo! will have another strong quarter," said Henry Blodget, an analyst at Merrill Lynch, ahead of the earnings report. "Yahoo! usually beats consensus and we would not be surprised to see it do it again. We would caution against wild enthusiasm, however, especially with regard to page views."
Blodget was one of the few analysts to go out on a limb, predicting 305 million page views a day in June, a sequential increase of 30 percent.
Of course, that includes about 40 million page views from its $3.56 billion acquisition of GeoCities. While GeoCities did record 62 million page views last quarter, Yahoo! doesn't count mini-pages called "pop-ups" in its traffic count.
Yahoo! had announced that it would take a $68 million charge in the quarter and lay off 100 GeoCities employees.
Simultaneously, it is integrating its $5.7 billion purchase of Broadcast.com.
In a separate release, Broadcast.com said it lost $1.9 million, or 5 cents a share, on sales of $13.5 million in its second quarter. The $13.5 million in sales represents a 130 percent jump vs.the year-ago period when it lost $3.5 million, or 11 cents a share, on sales of $5.9 million.
"There's going to be some moderate dilution down the road, but I'm not sure if we'll see much of that this quarter," said David Levy, an analyst at ING Baring Furman Selz. "Still, Yahoo!'s in the driver's seat and has a market-leading position."
By nabbing GeoCities and Broadcast.com, Yahoo! has improved its reach and its multimedia possibilities.
"This is the biggest test for Yahoo! so far," said Dawn Simon, an analyst at Brown Brothers Harriman. "Not only in terms of integrating all these employees and technologies, but how they use these assets."
Yahoo! is working on a plan to create a personalized multimedia portal for Net users, one that combines user-created content and communities from GeoCities with the audio and video streaming aggregation skills and technology of Broadcast.com.
But that broadband portal effort is still in the works. Meanwhile, Snap.com two weeks ago became the first portal to launch a so-called "broadband' portal for Net users with the kind of high-speed access needed.
As for the stock, Yahoo! shares have mirrored the rest of the Internet sector. After peaking at $244 a share in April, the stock rapidly fell to $119 in mid-June.
Twenty of the 26 analysts following the stock rate it either a "buy" or "strong buy."
"It's a good value right now and will be for the foreseeable future," Levy said. "I love the portal sector and Yahoo! is still is the undisputed leader."
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