As predicted yesterday on this blog Yahoo earnings suck and their stock falls 10%. Despite advertisers spending more money online and Yahoo completely revamping Yahoo Search Marketing they still fail.
I think the stock will fall even more if Google and Amazon throw out good numbers tomorrow and Thursday with their q4 earnings.
Via Yahoo News
The Sunnyvale-based company said Tuesday it earned $205.7 million, or 15 cents per share, during 2007’s final three months, a 23 percent drop from net income of $268.7 million, or 19 cents per share, at the same time in 2006.
Reflecting the gloomy aura hanging over Yahoo, analysts had prepared investors for even worse earnings erosion. The pessimism prompted analysts, on average, to project earnings of 11 cents per share for the period.
Revenue for the period totaled $1.83 billion, a 8 percent improvement from $1.7 billion in 2006.
After subtracting commissions paid to its advertising partner, Yahoo’s revenue fell to $1.4 billion, in line with analyst estimates.
Yahoo has been mulling firing hundreds of workers as part of its long-running effort to snap out of a stock decline during the past two years, but the company’s announcement Tuesday didn’t mention job cuts.
Yahoo co-founder Jerry Yang, who returned as chief executive seven months ago, signaled the company has challenges ahead.
“While we will continue to face headwinds this year, we believe that the moves we are making will help us exit 2008 stronger and more competitive and return to higher levels of operating cash flow growth in 2009,” Yang said in a statement.
Excluding ad commissions, Yahoo estimated its revenue this year will range from $5.35 billion to $5.95 billion. The average analyst estimate stood at $5.92 billion, according to Thomson Financial.
Yahoo shares plummeted about $2 to $18.93, almost 10 percent, in extended trading Tuesday after finishing the regular session at $20.81, up 3 cents.
Last year marked the first time Yahoo’s earnings have dropped from the previous year since the company lost $93 million in 2001 during the aftermath of the dot-com bust. That was also the last time that Yahoo fired hundreds of workers.
Unlike in 2001, Yahoo hasn’t stopped making money. But the company’s 2007 profit fell 12 percent to $660 million even though advertisers spent more than ever on the Internet, where Yahoo still draws one of the Web’s largest audiences.