Yahoo Seen Posting Strong Fourth Quarter
Friday January 13, 6:06 pm ET
Yahoo Seen Posting Strong Fourth Quarter, but 2006 Forecast a 'Question Mark'
NEW YORK (AP) -- Yahoo Inc. reports earnings for the fourth quarter on Tuesday. The following is a summary of key developments and analyst opinion related to the period.
EXPECTATIONS: Yahoo, one of the Internet's largest information portals and search companies, hasn't provided earnings expectations for the fourth quarter, but it has forecast revenue of $1.03 billion to $1.08 billion, excluding "traffic acquisition" costs, such as payments to companies that direct traffic to Yahoo's site.
Analysts are looking for fourth-quarter earnings of 17 cents per share on revenue of $1.07 billion, according to Thomson Financial. The earnings estimate doesn't reflect the adoption of stock-option accounting.
ANALYST TAKE: "We anticipate the results will be near the high end or slightly above the guidance range, which could lead to a penny or so of upside," Troy Mastin, an analyst at William Blair & Co., said in a client note Friday. Mastin is also optimistic that Yahoo will unveil long-awaited improvements to its search service that could rival Google Inc.'s system.
RBC Capital Markets analyst Jordan Rohan, however, said Yahoo's 2006 guidance "is still a question mark." "With the potential for solid but unspectacular guidance, we prefer to wait for a pullback before adding to positions," Rohan said in a note Friday.
Bear Stearns analyst Alexia Quadrani said in a note Friday that "we expect Yahoo to report strong fourth-quarter results," and "we believe the outlook for 2006 remains bright."
QUARTER DEVELOPMENTS: Yahoo disclosed plans during the quarter to begin offering Skype-like capabilities through its instant-messaging service that will let people dial regular phone numbers using their computers or receive calls from conventional phones. The Sunnyvale, Calif.-based company also during the quarter acquired del.icio.us Inc., a startup that lets users create Web pages devoted to their favorite online articles, music and reviews.
COMPETITORS: Google recently reached a $1 billion deal with Time Warner Inc. to buy a 5 percent stake in America Online, ending weeks of speculation and giving the online giant added ground in the hot online advertising sector. Elsewhere in the industry, eBay Inc., of San Jose, Calif., in November appointed Henry Gomez to head the North American operations of Skype, its new Internet telephone unit. Gomez was previously a senior vice president of corporate communications and government relations at the Internet auction company. eBay closed its acquisition of Skype in October for about $2.6 billion in cash and stock for the Luxembourg-based company.
STOCK PERFORMANCE: Yahoo shares gained 16 percent during the quarter, ending the year up 2.6 percent. On Monday, the stock hit a 52-week high of $43.66. Yahoo shares recenrly fell 94 cents, or 2.3 percent, to $39.95 on Nasdaq. |
