) is set to report third-quarter 2013 results on Oct 15. Last
quarter, it posted a 15.38% positive surprise. Let's see how
things are shaping up for this announcement.
Growth Factors this Past Quarter
Yahoo's second-quarter earnings exceeded the Zacks Consensus
Estimate by 5 cents driven by its equity holdings in Alibaba and
Yahoo Japan. However, GAAP revenues of $1.14 billion were down
sequentially as well as year over year. Margins expanded both
sequentially as well as from the year-ago quarter due to solid
expense management and a favorable mix.
Yahoo provided a tepid outlook for the third quarter, with
revenues expected to be within $1.12-1.17 billion, adjusted
EBITDA of $330-$350 million and operating income of $165-$185
Our proven model does not conclusively show that Yahoo will
beat earnings this quarter. That is because a stock needs to have
both a positive earnings expected surprise prediction or
and a Zacks Rank #1, 2 or 3 for this to happen. That is not the
case here as you will see below.
Negative Zacks ESP:
The Most Accurate estimate stands at 24 cents while the Zacks
Consensus Estimate is higher at 27 cents. That is a difference of
Zacks Rank #3 (Hold):
Yahoo's Zacks Rank #3 (Hold) when combined with a negative ESP
makes surprise prediction difficult.
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
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:
), with Earnings ESP of +1.00% and a Zacks Rank #1 (Strong
Micron Technology Inc.
), with Earnings ESP of +4.35% and a Zacks Rank #1 (Strong
Lithia Motors Inc.
), with Earnings ESP of +2.73% and a Zacks Rank #2 (Buy).
JARDEN CORP (JAH): Free Stock Analysis Report
LITHIA MOTORS (LAD): Free Stock Analysis
MICRON TECH (MU): Free Stock Analysis Report
YAHOO! INC (YHOO): Free Stock Analysis Report
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