Yahoo! (Nasdaq: YHOO) shares are modestly higher Tuesday
afternoon as traders prep themselves for second-quarter earnings
results. Yahoo! will release earnings this afternoon following the
close of trading.
The company is expected to report earnings of 18 cents per share on
revenue of $1.11 billion. Hitting the Street's expectations would
mark a 5.9 percent increase sequentially, and 20 percent gain from
the 15 cents per share reported in the same period last year.
Yahoo! shares currently trade at 15.9x FY12 earnings estimates,
compared with 15.2x for Google (Nasdaq: GOOG) and 20.9x for AOL,
Data from Bloomberg has 14 analysts with a Buy rating, 19 at Hold,
and zero suggesting to sell.
for some color on those calls in our Ratings Insider section.
Further, the Street price target average is $19.50 with a low of
$16 and high of $24. Yahoo! has traded in a range of $12.94 to
$18.84 over the last 52-weeks.
- Deutsche Bank sees EPS of 21 cents on revenue of $1.09
billion. Commenting on its outlook: "From a top-line standpoint,
we expect a 3% decline in net revs, based on 14% growth in
display ads (which looks to be in line or lower vs. ests) while
paid search is estimated to fall 19% Y/Y. We think that paid
search queries were largely in-line with expectations while
monetization is guaranteed through 1Q 2012. We believe the
variance between current Microsft CPCs and the Yahoo! guarantee
runs at about 10% currently, with the holiday season representing
a key time period in which monetization needs to improve on CPCs.
At current CPC rates, we estimate that 2012 forecasts would be
impacted by $110mn in revs and $90 - $100mn in EBITDA."
Keys on the call include: an update on Yahoo!'s progress in talks
with Alibaba regarding compensation for the transfer of Alipay to
a Jack Ma wholly-owned entity; display and paid search trends;
and new applications on Yahoo!'s tablet/mobile efforts.
- Recently, Jefferies
made some comments
ahead of Yahoo!'s earnings. "The firm isn't looking for anything
too surprising this quarter, earnings expected to be in-line with
the consensus. Revenues, ex-TAC, should be $1.12 billion with
earnings of 19 cents per share."
- BGC Capital sees earnings of 18 cents per share on revenue of
$1.112 billion. On management: "While CEO Carol Bartz has entered
into the third year of her contract, the company is still very
much in the process of turning itself around. In our opinion,
while she has just finished assembling her team of senior talent
including new additions such as Ross Levinsohn to oversee Yahoo
Americas and Wayne Powers to oversee sales (both in November
2010), and Blake Irving last spring as Chief Product Officer, the
honeymoon is long over and lackluster results could increase
concerns on the pace of the turnaround."
BGC sees display revs of $53 million ex.-TAC. Search, also
ex.-TAC, will be $358 million. Further: "The company has done an
excellent job of controlling costs which is reflected in its
operating margin doubling to 12% in 2010 from 6% in the prior
year. However the earnings expansion is now a year old and the
benefits from the cost cutting have been seen."
Stay tuned to StreetInsider.com's
section to see our analysis of the highly-anticipated quarterly
results within seconds of the release.