Yahoo! Beats Wall Street Estimates
By David Shabelman and George Mannes
Staff Reporters
7/7/99 5:09 PM ET
SAN FRANCISCO -- Yahoo! (YHOO:Nasdaq) gave the hordes famished for Internet earnings data some nourishing morsels that could portend a strong quarter for other Internet companies.
In typical fashion, the company bested consensus earnings estimates, reporting fiscal second-quarter pro forma earnings of 11 cents a share. The First Call consensus estimate called for earnings of 8 cents a share, with a whisper number of around 10 or 11 cents. (None of those numbers include amortization of intangible assets.)
Net/Tech Indices
INDEX CHANGE % VALUE
TSC Internet 11.74 -1.7% 653.85
TSC E-Commerce 0.97 -0.9% 112.02
TSC E-Finance 2.24 -2.4% 93.11
Nasdaq 6.30 +0.2% 2743.08
Yahoo! also didn't disappoint analysts who expected the portal giant to report substantial revenue growth. Second-quarter revenue rose to $115.2 million, beating estimates of about $103 million and first-quarter revenue of $86 million. Yahoo! reported revenue of $41.2 million in the second quarter of last year. Neither the year-ago nor the first-quarter figure included the recent acquisition of GeoCities.
Average daily page views, a number that analysts follow to gauge Yahoo!'s popularity, amounted to 310 million in GeoCities-aided June, compared to 235 million per day in GeoCities-free March.
Ahead of the report, Yahoo! closed down 8 1/16 to close at 167 1/16. The stock has made a habit of running up in front of its earnings report, then selling off after, even when the company beats earnings estimates.
Weakness in Yahoo! during most of Wednesday's trading applied pressure on the Internet sector in general. Yahoo! is not only among the first of the Internet stocks to report earnings each quarter, it's still seen as a bellwether for the industry. Yahoo! closed down 8 1/16, or 5%, to 167 1/16, and TheStreet.com Internet Sector index ended the session down 11.5, or 2%, at 653.8.
Musicmaker.com
You've got to give credit to a company that had only $20,000 in revenue in the first quarter and less than $75,000 for all of last year when it ends its first day of trading with a $200 million market cap. Musicmaker.com, which provides customized music CD compilations over the Internet, closed at 23 15/16, up 71% from its offering price of 14, despite the company's choice of "HITS" for its ticker. What more evidence is needed that Internet IPO madness is back in full fever?
A number of recent IPOs that have rallied sharply in recent days saw profit-taking Wednesday. Redback Networks (RBAK:Nasdaq), which provides Net access management systems, closed down 8 1/8, or 5%, at 145 after gaining 18 points on Tuesday. Also, E-Loan (EELN:Nasdaq), which traded as high as 74 3/8 after going public at 14 last week, closed down 6 3/4, or 11%, at 56 1/4. And Juniper Networks (JNPR:Nasdaq), which has been nothing short of a sensation since going public June 25, dropped 4 7/16, or 3%, to 135 1/16.
Bucking the trend was Lycos (LCOS:Nasdaq), which closed up 3 7/16, or 3%, at 107 1/4. The Net portal said it had entered into an agreement with fiber-optic network builder RCN (RCNC:Nasdaq) on a number of Internet-based initiatives, including the development of high-speed content to be deployed over RCN's network. RCN finished up 1 15/16, or 4%, at 45 15/16.
barnesandnoble.com (BNBN:Nasdaq) closed up after the online bookseller launched its online music store in an attempt to take on retailing giant Amazon.com (AMZN:Nasdaq). barnesandnoble.com closed up 7/16, or 3%, at 17 11/16, while Amazon.com ended down 5, or 4%, at 121 7/8.
Net IPO madness railed on with the debut of Musicmaker.com (HITS:Nasdaq), a provider of customized music CD compilations over the Internet. The company, which had only $20,000 in revenue in the first quarter of 1999, was solid gold in its debut, closing up 71% from its offering price of 14, at 23 15/16.
And a recent IPO that was lambasted after closing below its opening price, Salon.com (SALN:Nasdaq), went on the offensive today. Salon said its network users will be able to purchase tickets online to arts and cultural events through the CultureFinder.com integrated ticketing service. It finished up 1 13/16, or 17%, at 12 3/4.
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