Yahoo Shares Feel Pressure Ahead of Next Week's Earnings

For a while recently, it looked like Yahoo shares might start pulling out of their longtime $16 range, boosted by various and sundry rumors about the sale of its Asian assets and other machinations.

But, as worries about its next earnings call in less than a week coalesce, the Internet giant’s stock has settled right around its 50-day moving average of $16.59, closing down 1.85 percent at $16.50 yesterday.

That’s not bad given the stock has a 52-week low of $12.94 (and a 52-week high of $19.12).

But, it did not stop Morgan Stanley from downgrading Yahoo shares on Monday and cutting its revenue and earnings estimates.

The reason? “Deteriorating fundamentals” and a belief that “users will increasingly consume media/content on Facebook vs. Yahoo!”

You think? (As Yahoo has found, it appears that the kids love to social network!)

Thus, despite a healthy valuation for those Asian assets in the Alibaba Group and Yahoo! Japan and some speculation about the sale of them–the lack of any revenue growth in Yahoo’s core U.S. market is still the big drag on the Silicon Valley icon.

Because of that, there has also been increased short seller activity recently, which means all eyes will be on Yahoo’s fourth-quarter earnings release next Tuesday, Jan. 25.

Currently, Wall Street analysts expect higher earnings of 22 cents a share on revenue of $1.19 billion for Yahoo.

That revenue number is lower than a year ago, due to a weakening display advertising business and declines in search ad revenue at the company.

And it will not help if Google, as expected tomorrow, turns in a blow-out quarter, especially if it shows strength in its own display business.

So, after its continued lackluster revenue in the last quarter, top executive turnover in its media business and layoffs in December, investors are going to be expecting some long-promised sign of turnaround from Yahoo CEO Carol Bartz.

Whether she can finally start to deliver on that or not next week remains to be seen.

Anonymous

She can pull out the passable numbers again thanks to the layoffs. We’re sure to hear the same refrain about how things are going to eventually get better. Probably another “plan” of sorts. Some more pep talk about the MS partnership no doubt, and international expansion. But as that awesome old lady in the Wendy’s commercial used to say, “Where’s The Beef?”

Displays are down again, along with market share. They haven’t bought a winner in forever, and pretty much messed up all the ones they managed to acquire, so long ago. Not much point in spending another few hundred million only to lose it all in a couple of years. The whole web-enabled TV idea is going nowhere fast, as well. There really isn’t too much to get excited about with Yahoo is there? I mean, sure they’ve got a lot of eyeballs still. But every effort to connect themselves to those folks that are currently on the rise, seems to always have the opposite effect. Now, if we don’t even have to log into Yahoo to visit their any of their properties, we probably won’t bother going to that still kinda lame e-mail much anymore, which in turn won’t (mis)direct anybody to their home page for easy traffic numbers to charge more for ads with.

The Yahoo downward spiral continues. That PR fiasco of sunsetting products being artfully explained away by the hatchet-lady should be entertaining though. That, or the next really silly named plan for success in their long succession of suckiness. Let’s all take bets on whether it will be named for a geological location, or have a really cool animal name. I’m going for either Panda or Pandora.

Bartz should be in DC right now, rubbing elbows with Mr. Hun. Maybe turning some more dissident Yahoo users in, as trade for an inside deal to help spread communism. I’m sure they would find they have a lot in common. All great dictators think alike. It’s certain they could come up with a great plan that would allow Yahoo domination of the asian sector. Maybe infanticide of all the chinese Google employees’ first born, or something like that.

Yahoo Shares Feel Pressure Ahead of Next Week's Earnings

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