Yahoo! Inc (YHOO) is scheduled to report their third quarter results on Tuesday, October 20, 2009. In the last four quarters, the company's actual earnings exceeded the market's consensus significantly. I believe the trend will continue in the third quarter as well.
Analysts' estimates for the quarter ending September 2009 (Q3) range from a low of $0.03 to a high of $0.1, with a consensus of $0.069.
For the fiscal quarter ending September 2009, the consensus EPS forecast has remained the same over the past week at $0.069 and increased over the past month from $0.068 to $0.069 (1.47%). Of the 29 analysts making quarterly forecasts, 2 raised and none lowered their forecast. The company said it expects third-quarter GAAP revenue to range between $1.450 billion and $1.550 billion, and income from operations in range of $55 million - $65 million. That compares to earnings of 9 cents a share, and $1.3 billion in net revenue in the same period last year.
Yahoo depends heavily on Internet display advertising, a business that has been sharply undercut by the economic downturn and the corresponding drop in marketing budgets. The company's report is likely to follow a recent dose of negative news about its online search business. ComScore Inc. published data on Wednesday showing that Yahoo's share of U.S. search market slipped to 18.8% in September, while its peers Google Inc. and Microsoft Corp. each saw gains in the period.
On a positive note, on a sequential basis, the company is expected to see growth in the health, travel and telecom sectors as there are signs of stabilization in the automotive sector. Cash costs are expected to come in at the low end of the company's expectations due to savings from the restructuring actions the company has taken over the last several quarters.
On a negative note, Yahoo earlier this year agreed to a search partnership with Microsoft, in order to better compete with Google. That partnership is currently being reviewed by U.S. Justice Department antitrust regulators.
For the fiscal year ending December 2009, the consensus EPS forecast has remained the same over the past week at $0.356 and increased over the past month from $0.354 to $0.356 (0.56%). Of the 29 analysts making yearly forecasts, 3 raised and 1 lowered their forecast.
Yahoo shares have risen less than 10% in the past three months, trailing well behind the Nasdaq Composite Index's gains over the same period. Yahoo shares closed Friday up slightly at $16.81, compared to 52 week range of $8.94 and $17.94.
