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Yelp, Inc. (YELP) Q4 Earnings Preview: Tis The Season For Guidance

 February 05, 2013 04:03 PM

(By Rich Bieglmeier) Yelp, Inc. (YELP) will issue its financial results for the fourth quarter and full year ended December 31, 2012 after the market close on Wednesday, February 6, 2013.  Yelp will host a conference call to discuss the results at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) on the same day. Wall Street anticipates that YELP will lose $0.04 for the quarter. iStock expects the internet service provider to report earnings that will hit Wall Street's consensus number. The iEstimate is -$0.04, too.

Yelp, Inc. operates Yelp.com, an online urban city guide that helps people find places to eat, shop, drink, relax, and play based on the informed opinions of a community of locals in the know. It offers information relating to restaurants, shopping, food, nightlife, arts and entertainment, local flavor, public services and government, active life, event planning and services, hotels and travel, beauty and spas, education, health and medical, local services, home services, religious organizations, professional services, mass media, automotive, pets, financial services, and real estate.

[Related -Yelp Inc. (YELP) Q2 Earnings Preview: About to Pound Wall Street’s Expectations?]

In YELP's three quarterly report cards since going public, YELP beat earnings once by 50%, missed once by 72%, and hitting the target last time out. Unfortunately, the stock lost ground in the days around earnings two out of three announcements with the following performance from most recent -21.2%, up 30.3%, and down 2.2%.

[Related -Are Google And Others Looking To Make A Deal?]

Since YELP is an internet based service, internet traffic tools should be able to help us uncover clues for Wednesday's news. According to Alexa.com, YELP traffic is up 12.1% in the last three months and 24.9% in the last month. Two of the three months fall into Q1. Meanwhile, liftoff started at the end of 2012. So, the first two months on Q4 might be on par with Q3, but most likely touch higher.

Google Trends should provide some hints, too. According search volume scores from Google, year-over-year (YoY), queries are up 13.1% for the keyword "YELP"; however, they are down 15.85% compared to QE3. It makes sense considering Q4 falls in the winter; it's a seasonal thing.

The seasonal effect can be seem most prominently for the keywords "Yelp Chicago", which are down 20.09 quarter-over-quarter (QoQ) and lower by 12.5% YoY. New York City sees similar a similar Q3 v Q4 drop off of 21%. Things are a much better in Los Angeles where YoY search volume is up a smart 31% and 3.7% QoQ.

Overall, iStock thinks Yelp, Inc.'s (YELP) fourth quarter earnings could trail Q3 results of a loss of 3 cents. While investors might be disappointed with a step backwards, seasonal factors and rapidly rising web traffic for the early part of Q1 could mean management ups guidance for Q1 and 2013.

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