Tag Archives: yhoo

Yahoo Earnings Fall Less Than Expected; No Update On Takeover Bids

Giving no specifics on its efforts to find a buyer for its core, and perhaps other, businesses,  Yahoo ( YHOO ) late Tuesday reported Q1 earnings and revenue that topped Wall Street expectations despite what its CEO called “substantial noise.” Yahoo stock was up 1.5% in after-hours trading Tuesday after the company released its earnings, though its Q2 revenue outlook lagged analyst expectations. “Over the past two months, (CFO) Ken (Goldman) and I have spent time in person and on the phone with interested participants,” Yahoo CEO Marissa Mayer said on the company’s earnings conference call. “We personally answered hundreds of requests for information. We are moving forward at the fastest possible pace.” The company reportedly had set a deadline of Monday for bids by potential acquirers, as the company has put all options on the table after failing to generate consistent revenue growth over the past decade.  Verizon Communications ( VZ ), which owns AOL, reportedly is among the most active bidders. For Q1, Yahoo said that its earnings per share minus items fell 47% to 8 cents from 15 cents in Q1 2015, but analysts polled by Thomson Reuters had expected just 7 cents. Revenue fell 11% to $1.09 billion, in the upper end of Yahoo’s guidance range of $1.05 billion to $1.09 billion and just above the $1.08 billion that analysts had expected. Yahoo posted revenue minus TAC — traffic acquisition costs, or what Yahoo must pay to other sites to carry its ads — of $859.38 million, down 17%. That’s above the $847 million that FactSet had forecast. But it’s below the $1.04 billion in ex-TAC revenue that Yahoo reported in Q1 2015. For Q2, the company forecast revenue of $1.05 billion to $1.09 billion, down 14% at the midpoint and lagging consensus views of $1.102 billion. Despite “substantial noise,” Mayer said on the conference call, the company has “made great progress.” CEO Said Company Aligned On Top Priority “Our 2016 plan is off to a solid start as we continue to focus on driving efficiency, lowering costs and improving long-term growth,” Mayer said in the company’s earnings release. “In tandem, we made substantial progress toward potential strategic alternatives for Yahoo. Our board, our management team and I are completely aligned on this top priority for shareholders.” Yahoo has formed a strategic review committee of independent directors to consider strategic alternatives for the company and for its big stakes in China’s Alibaba Group ( BABA ) and in Yahoo Japan. Yahoo stock fell a fraction in Tuesday’s regular session, to 36.33, but it’s up nearly 40% since touching a nine-month low in early February. S&P Global Market Intelligence analyst Scott Kessler, in a research report last week, said that he was bracing for disappointment, “given continuing fundamental challenges and questions about company leadership.” At the time, Kessler downgraded Yahoo stock to hold from buy. On the other hand, Yahoo stock received at least two price-target boosts in the past two weeks. Pivotal raised its price target to 40 from 35, primarily due to recent gains by Alibaba. Most of Yahoo’s value comes from its 15% stake in the China e-commerce titan. Yahoo’s total market cap is about $34 billion. SunTrust Robinson Humphrey analyst Robert Peck raised his price target to 44 from 40 on April 13 and maintained a buy rating, citing “hidden assets” that could drive up the bidding price for the struggling Web portal. Those assets, Peck said, include royalties from Yahoo Japan, thousands of patents and plentiful real estate. Minus a “potential upside” from those assets, SunTrust expects Yahoo to fetch bids in the $6 billion to $8 billion range for its core business. Some reports estimate that as many as 40 groups have expressed interest in the wilting Sunnyvale, Calif.-based Web portal, although Fortune said in a report on Friday that the number was too high. News site Re/Code said that documents Yahoo provided to potential bidders predict that Yahoo’s 2016 revenue will fall nearly 15% and its earnings by more than 20%. On Tuesday, Goldman said that Yahoo’s head count, including contractors, was down 42% from the start of 2012 to 9,200, and the company continues to cut costs. Yahoo reported that its revenue from Mavens rose more than 6% to $390 million and accounted for 38% of total revenue, up from 33% in Q1 2015. Mavens refers to Yahoo’s revenue from mobile, social, video and native advertising, where revenue is growing. The company hopes that the segment will offset declining revenue from its legacy advertising.

Verizon Earnings Call: Yahoo, Frontier Deal, Strike, Wireless War

Verizon Communications ( VZ ), on the hunt for Internet pioneer  Yahoo ( YHOO ), is expected to update 2016 guidance when it reports Q1 earnings on Thursday, in the wake of selling wireline assets in three states to Frontier Communications ( FTR ). Verizon and AT&T ( T ) were among the best performing large-cap stocks in the S&P 500 in the March quarter. AT&T reports Q1 results on April 26. Verizon sold wireline assets in California, Florida and Texas to Frontier for $10.5 billion. The deal closed in early April. Aside from Verizon’s stated interest in acquiring Yahoo , analysts may ask for management views on how a strike by 39,000 wireline workers will impact Verizon’s FiOS business. “We expect Verizon to update 2016 guidance post the recent close of the Frontier deal, including clarity around EBITDA (earnings before interest expenses, taxes, depreciation and amortization) guidance and subsequent cost cuts, which we believe management has thus far conservatively guided,” said Colby Synesael, an analyst at Cowen & Co., in a report. “While it’s likely someone will bring up Yahoo during Q&A, it’s unlikely management provides much of a response.” Analysts polled by Thomson Reuters expect Verizon’s Q1 profit to rise 4% to $1.06 per share, with revenue growing 2%; these predictions include Verizon’s June 2015 acquisition of AOL. Wireless competition remained intense in Q1 amid a flurry of video-related promotions, analysts say. UBS analyst John Hodulik forecasts that Verizon will lose postpaid phone subscribers in Q1, as it did in the March quarters in 2014 and 2015.

3 Earnings Reports To Watch Tuesday: Yahoo, Intel, UnitedHealth

Yahoo ( YHOO ), Intel ( INTC ) and UnitedHealth ( UNH ) headline another busy day for earnings, though investors may look past headline EPS for all three industry giants. Yahoo Yahoo is expected to report a 53% year-over-year decline in EPS to 7 cents after the market close Tuesday. Revenue likely fell 12% to $1.08 billion, with revenue excluding traffic acquisition costs seen declining even faster. CEO Marissa Mayer has been unable to fuel significant growth since taking the helm in 2012. What investors will want to know is any information on the Yahoo bidding process, with offers due on Monday. Yahoo is entertaining offers for all or part of the Web portal, including its core U.S. operations and its Alibaba ( BABA ) stake. It’s unclear if Yahoo will say anything at all. Various reports said Verizon Communications ( VZ ) and YP Holdings, owned by Cerberus Capital and AT&T ( T ), are among the purported bidders . Yahoo stock rose 1 cent to 36.52 on the stock market today . Shares hit an 8-month high of 37.50 last week. Intel Intel also reports after Tuesday’s closing bell. Analysts expect EPS to rise 15% to 47 cents, with revenue up 8% to $13.83 billion. The key is to what extent data center chips offset weakness for PC chips. Investors will want to know if weak PC sales are continuing in Q2, and whether Intel will cut full-year guidance. Looking ahead, Apple may source 30 million to 40 million iPhone 7 modem chips from Intel, taking share from Qualcomm ( QCOM ), according to Canaccord analyst T. Michael Walkley. Qualcomm, which reports earnings Wednesday evening, will still get most of that business. Apple will release its iPhone 7 later this year. Intel rose 0.6% on Monday, find support just over its  200-day moving average. Qualcomm rose 1%, but remains in a downtrend going back to mid-2014. Apple fell 2.2%, continuing to fall after undercutting its 200-day line. UnitedHealth The No. 1 U.S. health insurer, and the first to report Q1 results, is due out Tuesday morning. Analysts expect an 18% EPS rise to $1.72, with revenue up 23% to $43.96 billion. Investors will looking for industry clues about membership, medical costs.  They’ll also want to know more about UnitedHealth’s plans for the ObamaCare exchange. UnitedHealth, which was cautious about entering these marketplaces, has been the most vocal about getting out, perhaps  entirely in 2017, due to ongoing losses. UnitedHealth last week announced it was exiting the Arkansas, Georgia and Michigan exchanges. If UnitedHealth drastically scales back its participation, it could reduce competition and boost premiums for enrollees. But if UnitedHealth spurs a stampede of insurers getting out, the impact could be huge. UnitedHealth stock rose to a new high a month ago, moving sideways since then. Shares rose 0.4% to 127.81 on Monday.