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Yahoo posts higher net, raises guidance
Los Angeles, July 10: Internet media company Yahoo Inc. on Wednesday posted a quarterly net profit that more than doubled from a year ago, meeting but not beating Wall Street estimates and prompting profit-taking in the company`s shares.
Los Angeles, July 10: Internet media company Yahoo Inc. on Wednesday posted a quarterly net profit that more than doubled from a year ago, meeting but not beating Wall Street estimates and prompting profit-taking in the company's shares.
Yahoo also raised its forecast for the year but its shares fell nearly 6 per cent in after-hours trade in a move that analysts said reflected the bullish expectations that investors had carried into the earnings report.
"I think people might have expected a little bit more," said Safa Rashtchy, analyst at US Bancorp Piper Jaffray.
Yahoo reported a net profit of $50.8 million, or 8 cents per share, for the second quarter, compared with a year-earlier profit of $21.4 million, or 3 cents per share. Revenue rose to $321.4 million from $225.8 million a year earlier. It was the company's largest quarter ever by revenue, Chief Financial Officer Susan Decker said on a conference call, "even including the heady dot-com days of yesterday."
Analysts surveyed by Reuters Research had expected earnings of 8 cents per share on revenue of $313.3 million.
The company's biggest segment, marketing services, saw revenue grow to $219.2 million from $151.7 million a year earlier. Marketing services include the company's sponsored search business, a major area of growth.
"The report is solid. Expectations were very, very high going into the quarter," said Jordan Rohan, an analyst at SoundView Technology Group.
Yahoo ended the quarter with $1.08 billion in cash, which Chief Executive Terry Semel said the company was in no rush to spend. Yahoo said it now expects revenue of $318 million to $338 million for the third quarter, with operating income before depreciation and amortization of $94 million to $104 million.
For the year, it expects revenue of $1.26 billion to $1.31 billion with operating income before depreciation and amortization of $375 million to $400 million.
Analysts had expected revenue of $325.5 million for the third quarter and $1.28 billion for the year, according to Research.
The company ended the quarter with 3.5 million paying subscribers to its various services like an Internet access deal with SBC Communications Inc. . As a result, Yahoo raised its subscriber estimate for the year to a range of 4.2 million to 4.5 million paying subscribers.
Yahoo has talked about a "bring-your-own-access plan," where subscribers could get some Yahoo premium services in a bundle regardless of their service provider. But Semel said the priority was upgrading the SBC service and launching a similar U.K. service with British Telecom later this year.
"As soon as we've launched those two we will then go with ... a package of Yahoo broadband products available wherever you're getting your access from," he said.
Yahoo shares fell in after-hours trade, dropping about 6 per cent to $33.25 on Instinet from a close of $35.29 on Nasdaq. The stock has lately traded at highs last seen in February 2001, leading some analysts to question whether it is overvalued at a price-to-earnings ratio of 74 based on 2004 average estimated earnings.
Yahoo shares have surged by 116 per cent since the start of the year. Bureau Report
"I think people might have expected a little bit more," said Safa Rashtchy, analyst at US Bancorp Piper Jaffray.
Yahoo reported a net profit of $50.8 million, or 8 cents per share, for the second quarter, compared with a year-earlier profit of $21.4 million, or 3 cents per share. Revenue rose to $321.4 million from $225.8 million a year earlier. It was the company's largest quarter ever by revenue, Chief Financial Officer Susan Decker said on a conference call, "even including the heady dot-com days of yesterday."
Analysts surveyed by Reuters Research had expected earnings of 8 cents per share on revenue of $313.3 million.
The company's biggest segment, marketing services, saw revenue grow to $219.2 million from $151.7 million a year earlier. Marketing services include the company's sponsored search business, a major area of growth.
"The report is solid. Expectations were very, very high going into the quarter," said Jordan Rohan, an analyst at SoundView Technology Group.
Yahoo ended the quarter with $1.08 billion in cash, which Chief Executive Terry Semel said the company was in no rush to spend. Yahoo said it now expects revenue of $318 million to $338 million for the third quarter, with operating income before depreciation and amortization of $94 million to $104 million.
For the year, it expects revenue of $1.26 billion to $1.31 billion with operating income before depreciation and amortization of $375 million to $400 million.
Analysts had expected revenue of $325.5 million for the third quarter and $1.28 billion for the year, according to Research.
The company ended the quarter with 3.5 million paying subscribers to its various services like an Internet access deal with SBC Communications Inc. . As a result, Yahoo raised its subscriber estimate for the year to a range of 4.2 million to 4.5 million paying subscribers.
Yahoo has talked about a "bring-your-own-access plan," where subscribers could get some Yahoo premium services in a bundle regardless of their service provider. But Semel said the priority was upgrading the SBC service and launching a similar U.K. service with British Telecom later this year.
"As soon as we've launched those two we will then go with ... a package of Yahoo broadband products available wherever you're getting your access from," he said.
Yahoo shares fell in after-hours trade, dropping about 6 per cent to $33.25 on Instinet from a close of $35.29 on Nasdaq. The stock has lately traded at highs last seen in February 2001, leading some analysts to question whether it is overvalued at a price-to-earnings ratio of 74 based on 2004 average estimated earnings.
Yahoo shares have surged by 116 per cent since the start of the year. Bureau Report