News : Yahoo Warns on 2008 Outlook; Shares Fall
By CNBC.com with Wires
Yahoo topped expectations despite a 23 percent earnings decline, but shares of the company fell as its sales guidance was light and Chief Executive Jerry Yang warned of 2008 "headwinds."
Yahoo's headquarters building in Sunnyvale, Calif.
Investors were disappointed with Yahoo's revenue forecasts for the first quarter and full year, even though Wall Street had already lowered expectations.
"I would classify the results as mediocre and the guidance as cautious,'' said Ryan Jacob, a fund manager at Jacob Internet Fund in Los Angeles. "I think Yahoo is telegraphing the fact that they will be spending more in 2008 to try and regain their competitive position against Google.''
The online advertising and search firm reported a fourth-quarter profit of $205.7 million, or 15 cents a share, excluding traffic acquisition costs. Revenue reached $1.403 billion.
A consensus estimate compiled by Thomson Financial put Yahoo's earnings at 11 cents a share on a topline of $1.406 billion.
In the same period last year, Yahoo brought in earnings of 19 cents a share on sales of $1.228 billion.
Yahoo's sales guidance was lighter than expected. The company said it expects revenue between $1.28 billion and $1.38 billion in the first quarter, compared with forecasts of $1.36 billion for the period.
Yahoo put full-year sales at between $5.35 billion and $5.95 billion, versus projections of $5.89 billion.
Shares of Yahoo tumbled more than 10 percent in extended trading after finishing regular market hours [YHOO 20.81 0.03 (+0.14%) ] up marginally at $20.81.
"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.
Yahoo's larger share of the display market makes it more vulnerable to any spending pullbacks in a recession. Analysts expect key rival Google may fare better in a downturn with its dominance of paid search listings, a form of advertising that is viewed as more closely tied to sales.
In the quarter that ended Dec. 31, Yahoo revamped its search engine and announced several online advertising agreements.
The struggling Internet icon, which has been falling behind rival Google in the search and online ad markets, considered the search engine changes the most significant since Yahoo reclaimed control of the technology behind it several years ago.
Read MoreYahoo's headquarters building in Sunnyvale, Calif.
Investors were disappointed with Yahoo's revenue forecasts for the first quarter and full year, even though Wall Street had already lowered expectations.
"I would classify the results as mediocre and the guidance as cautious,'' said Ryan Jacob, a fund manager at Jacob Internet Fund in Los Angeles. "I think Yahoo is telegraphing the fact that they will be spending more in 2008 to try and regain their competitive position against Google.''
The online advertising and search firm reported a fourth-quarter profit of $205.7 million, or 15 cents a share, excluding traffic acquisition costs. Revenue reached $1.403 billion.
A consensus estimate compiled by Thomson Financial put Yahoo's earnings at 11 cents a share on a topline of $1.406 billion.
In the same period last year, Yahoo brought in earnings of 19 cents a share on sales of $1.228 billion.
Yahoo's sales guidance was lighter than expected. The company said it expects revenue between $1.28 billion and $1.38 billion in the first quarter, compared with forecasts of $1.36 billion for the period.
Yahoo put full-year sales at between $5.35 billion and $5.95 billion, versus projections of $5.89 billion.
Shares of Yahoo tumbled more than 10 percent in extended trading after finishing regular market hours [YHOO 20.81 0.03 (+0.14%) ] up marginally at $20.81.
"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.
Yahoo's larger share of the display market makes it more vulnerable to any spending pullbacks in a recession. Analysts expect key rival Google may fare better in a downturn with its dominance of paid search listings, a form of advertising that is viewed as more closely tied to sales.
In the quarter that ended Dec. 31, Yahoo revamped its search engine and announced several online advertising agreements.
The struggling Internet icon, which has been falling behind rival Google in the search and online ad markets, considered the search engine changes the most significant since Yahoo reclaimed control of the technology behind it several years ago.
Labels: yahoo wires internet google cnbc
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