By Dow Jones Business News,
January 29, 2014, 11:19:00 AM EDT
By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Yahoo Inc. was in the doldrums Wednesday as the online media company's shares slumped
more than 8% and led a slate of decliners on a mostly down day for the tech sector.
Yahoo (YHOO) gave up $3.03 a share to fall to $35.22 following the company's fourth-quarter results, which came out
late Tuesday. Yahoo reported earnings excluding one-time items of 46 cents a share, which topped the 39-cents-a-share
forecast of analysts surveyed by FactSet, but its sales of $1.2 billion were just in line with Wall Street's estimates,
and down slightly from a year ago.
And the main issue investors keyed on was a 6% drop in Yahoo's display-ad revenue, which was bigger than consensus
Mark Mahaney of RBC Capital Markets said that though he remains a believer in "a potential turnaround story" in
Yahoo's core business, "history suggests that this will be a multi-year process built on improved products and improved
execution. To date, we haven't seen any positive fundamentals impact from the accelerated pace of product innovation,
but we believe [and] hope this could happen sometime in 2014."
With Yahoo in the lead, several other Internet companies' shares were also in the red, including Facebook Inc. ( FB ),
which fell more than 2% to $53.68 ahead of the social-networking company's quarterly results, due after the close of
trading Wednesday. Facebook is expected to deal with questions about topics such as youth users and video ads after
reporting its results.
Among other Internet companies, Yelp Inc. (YELP) shares fell almost 4%, Pandora Media Inc. (P) was down nearly 2% and
AOL Inc. ( AOL ) shares gave up 3.6%.
VMware Inc. (VMW) shares shed 20 cents, to trade at $94.65 in the wake of mixed quarterly results late Tuesday, and
EMC Corp. ( EMC ) was off by 1.5% at $24.99 a share. Before the market opened, EMC reported a gain in its fourth-quarter
earnings, but gave a weaker-than-expected first-quarter forecast and said it could cut up to 1,000 jobs this year.
Videogame publisher Electronic Arts Inc. ( EA ) rose by 1.5% to $25.26 despite reporting weak fourth-quarter sales and
giving a disappointing outlook late Tuesday. However, many analysts remained upbeat on EA's prospects due to new game
consoles from Sony Corp. (SNE) and Microsoft Corp. ( MSFT ).
The tech-heavy Nasdaq Composite Index (RIXF) fell by 23 points to 4,074, but the Philadelphia Semiconductor Index
(SOX) managed to eke out a small gain.
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