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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Wally Mastroly who wrote (214)	7/12/2000 5:44:13 AM
From: Justa Werkenstiff	Read Replies (1) \| Respond to of 10065

Yahoo Reports That Earnings Beat Estimates by a Penny By MATT RICHTEL AN FRANCISCO -- Yahoo announced better-than-expected quarterly earnings and revenue Tuesday, quelling investor concerns that consolidation and business failures among struggling dot-coms might hurt its revenue base. Yahoo reported net income of $65.5 million for the quarter ended June 30, or 11 cents a share, compared with analysts' consensus projections of 10 cents a share. Revenue was $270.1 million, exceeding analysts' estimates of $240 million, and up from $128.6 million a year ago. Last quarter, the company reported net income of $63.3 million on revenue of $228 million. Some investors bet in recent weeks that Yahoo would not meet its target, as analysts warned of weakening revenue growth in the face of reduced advertising spending by some struggling Internet companies. Yahoo's share price was $148 three weeks ago, but has fallen steadily. It fell another $4.50 today, to closed at $105.50. But it rebounded in after-hours trading, rising to $121. Industry analysts said they were mildly but pleasantly surprised by the results, but disagreed on how much to read into the earnings report. Some said the quarter suggested that Internet companies like Yahoo that rely on advertising revenue could breathe more easily. But others said the results spoke more directly to the strength of Yahoo's business. "This is a respectable and solid quarter given the weakness in online advertising," said Jordan E. Rohan, an analyst with Wit Soundview, a New York-based brokerage firm. "Yahoo came through." He said the results showed that advertisers were continuing to support major online media companies, like Yahoo and America Online, but that it was unfair to assume that smaller Internet media companies would also enjoy continued support. "It is a mistake to apply it more generally," he said. Meanwhile, Yahoo did not dispute that consolidation in the Internet industry was having an impact on its business. The company said 10 percent of its advertising was coming from "financially questionable" companies -- not limited to Internet businesses -- though it declined to provide the dollar figure represented by those contracts. Susan L. Decker, Yahoo's new chief financial officer, said the company had taken an "exhaustive" look at the impact of struggling companies on its advertising revenue in light of the recent investor concern. Paul W. Noglows, an analyst with Chase H & Q, said the 10 percent figure was not surprising and was "lower than some people were guessing it might be." Rich LeFurgy, chairman of the Internet Advertising Bureau, a trade group representing Internet advertisers, said the 10 percent figure was in line with industry figures. In general, he said, "about 10 to 15 percent of these Internet deals are at risk." But he said the bigger players, like Yahoo, were not at particular risk in the event of a shakeout. "The leaders in the online ad world are going to fare better than the second- or third-tier sites that don't get much of a share of online ad dollars in the first place," he said. He added that Yahoo was also insulated because it had diversified its revenue between advertising and e-commerce sources. Timothy A. Koogle, Yahoo's chairman and chief executive, said consolidation in the dot-com industry might wind up helping Yahoo because weaker Internet companies would fall by the wayside, and Yahoo might recoup a larger share of the revenue from a stronger, more reliable advertising base. The company reported that it had retained all of its top 50 advertisers and 98 of its top 100 advertisers since the end of the first quarter. In a conference call with analysts and journalists, the company continued to hammer home its efforts to grow overseas, with what analysts described as positive results. The company said that 15 percent of its revenues came from global markets, excluding Japan, compared with 13 percent last quarter and 9 percent a year ago. The company said the number of individuals using the service rose to 156 million visitors in the second quarter, compared with 145 million in the first quarter. This was one potential area of lower-than-expected performance, said Noglows of Chase H & Q, who projected that the company would hit 160 million users. But Noglows said that "what was really significant was the revenue figure," and from that perspective, he described the quarter as "very strong over all." The earnings might provide some relief to other Internet companies, said Scott Reamer, an analyst with SG Cowen Securities. Reamer said that Yahoo had been seen as a bellwether and that if it had stumbled today, many smaller Internet companies might have toppled in its wake.