Yahoo! Inc. ( YHOO ) is set to
report first quarter 2013 results on Apr 16. Last quarter it posted
an 18% positive surprise. Let's see how things are shaping up for
Growth Factors this Past Quarter
Yahoo's fourth quarter 2012 revenues were up 12.0% sequentially
and 1.6% year over year. Display revenues (ex-TAC) increased 15.2%
sequentially while declining 4.6% from the comparable quarter of
2011. Management attributed the year-over-year decline to declining
engagement on key properties, primarily webmail.
Yahoo's display business was under pressure given the growing
success of archrival Google and Facebook. Yahoo was steadily losing
its market share.
However, under its new CEO Marissa Meyer, Yahoo has been active
on the acquisition front. It acquired 5 start ups mainly in the
mobile space. The acquisitions are part of a strategy to broaden
and strengthen Yahoo's expertise in the mobile segment as adoption
of mobile devices such as smartphones and tablets continue to
With these acquisitions, Yahoo is picking up a whole lot of
engineering talent as well as key technologies and products at a
cheaper rate. Yahoo also expects that these acquisitions will
enable it to enter the emerging social marketing segment, where its
rivals have already established themselves.
Our proven model does not conclusively show that Yahoo is likely
to beat earnings this quarter. This is because a stock needs to
have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method ) and a
Zacks Rank #1, #2 or #3 for this to happen. That is not the case
here as you will see below.
Zacks ESP : The Expected Surprise Prediction or
ESP, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is 0.00%.
Zacks Rank #1 (Strong Buy): Yahoo's Zacks Rank
#1 (Strong Buy) increases the predictive power of ESP and the Zacks
Rank #1 when combined with an ESP of 0.00% indicates the
possibility of a positive surprise. We caution against stocks with
Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings
announcement, especially when the company is seeing negative
estimate revisions momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows that they have the right combination of elements to
post an earnings beat this quarter:
Sandisk Corp. ( SNDK ), with an ESP of
+9.09% and a Zacks Rank #1 (Strong Buy).
Webcom Group Inc. ( WWWW ), with an ESP of
+5.13% and a Zacks Rank #2 (Buy).
Aol Inc. ( AOL ), with an ESP of
+3.03% and a Zacks Rank #3 (Hold).AOL INC (AOL): Free Stock Analysis ReportSANDISK CORP (SNDK): Free Stock Analysis ReportWEB.COM GROUP (WWWW): Free Stock Analysis
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