Yahoo! Inc. (NASDAQ: YHOO) is scheduled to release its first-quarter earnings after the closing bell on Tuesday, April 19, 2011. Analysts, on average, expect the company to report earnings of 16 cents per share on revenue of $1.06 billion. In the year ago quarter, the company reported earnings of 22 cents per share on revenue of $1.13 billion.
Yahoo! Inc. provides online properties and services to users; and marketing services to advertisers worldwide. The Company attracts users every month through its technology and engaging content and services.
Yahoo! Inc. provides online properties and services to users; and marketing services to advertisers worldwide. Yahoo! Inc., together with its consolidated subsidiaries, attracts hundreds of millions of users every month through its innovative technology and engaging content and services, making it one of the most trafficked Internet destinations. The company generates revenue by providing marketing services to advertisers across a majority of Yahoo! Properties and Affiliate sites.
In the preceding fourth quarter, the Sunnyvale, California-based company's net income was$312 million or $0.24 per share, compared to $153 million or $0.11 per share in the prior year quarter. On an adjusted basis, the company earned 26 cents per share in the fourth quarter. Revenue dropped 12 percent to $1.53 billion from $1.73 billion. Analysts, on average, expected the company to report earnings of 22 cents per share on revenue of $1.19 billion.
At its last earnings call in October, the internet giant said that it expects first-quarter GAAP revenue of $1.150 billion to $1.230 billion, and revenue ex-TAC of $1.020 billion to $1.080 billion.
Yahoo CEO Carol Bartz has shut underperforming businesses, cut costs and has continued to improve its products, such as its home page and e-mail service. Last month, the company said that it plans to shut down several products, including Yahoo Buzz and Traffic APIs, in the coming months as part of restructuring, the internet portal. Bartz has sought to streamline operations and has set a target of reaching a 24% operating margin by 2013. However, Bartz's turnaround strategy so far hasn't panned out the way investors hoped when Yahoo hired her to replace co-founder Jerry Yang in January 2009.
Yahoo has also sought to focus more on its online display advertising business and other services, while outsourcing the inner workings of its search service as part of a revenue-sharing arrangement with Microsoft Corp. (NASDAQ: MSFT). According to the arrangement, Yahoo will share 12% of the search advertising revenue with Microsoft, while Microsoft will bear most of the associated expenses.
However, the company is facing stiff competition from social networking services like Facebook, which are attracting greater numbers of online visitors and advertisers.
The company's stock currently trades at a forward P/E (fye Dec 31, 2012) of 17.77 and PEG ratio (5 yr expected) of 2.02. In terms of stock performance, Yahoo shares have lost nearly 9 percent over the past year.
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