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Related quotes

TWX |
17.32 |
+ 0.09 |
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YHOO |
49.99 |
- 0.16 |
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4/5/04 4:01:00 PM ET |
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 Yahoo ad sales, outlook take earnings spotlight Reuters, 04.05.04, 9:06 PM ET
By Lisa Baertlein
SAN FRANCISCO, April 5 (Reuters) - When Yahoo Inc.
(nasdaq: YHOO - news - people)
reports quarterly earnings this Wednesday, investors from Wall
Street to Main Street will be eyeing the Internet company's
advertising sales and earnings outlook for signs its stock is
not overpriced.
Following a predictable pattern of running up ahead of
earnings, Yahoo shares finished Monday's Nasdaq session at
$49.99, after hitting a new one-year high of $50.99 during the
session.
Yahoo investors "buy on the mystery, sell on the history,"
said American Technology Research analyst Mark Mahaney.
The company's stock chart looks like a jagged saw blade
with uptrends fueled by expectations of good financial results
and downdrafts driven by anything other than booming growth.
While some investors are sitting on the sidelines due to
Yahoo's rich, $33.3 billion valuation -- which makes it almost
half the size of media giant Time Warner Inc.
(nyse: TWX - news - people) on paper
-- the Internet bellwether's post-bubble resurgence is
difficult to ignore.
For the Yahoo's first quarter ending in March, analysts are
predicting strong results propelled by a revival in traditional
online advertising and continued strength in Web-search ads.
Piper Jaffray analyst Safa Rashtchy on Monday boosted his
forecast for year-over-year advertising growth to 25 percent
from 20 percent and raised his revenue and earnings targets.
He took his net income estimate up 1 cent to 11 cents a
share and raised revenues to $511.5 million from $505 million.
Analysts polled by Reuters Research see Yahoo posting
first-quarter earnings of 11 cents a share on revenue,
excluding traffic acquisition costs, of $484.68 million.
Traffic acquisition costs are advertising revenues that
Yahoo shares with its distribution partners.
Fulcrum Global Partners analyst Imran Khan added that
Yahoo's traffic and key-word advertising prices are on the
rise, bolstering advertising revenues.
The improving job market, too, could be setting the stage
for better-than-expected results at Yahoo's HotJobs unit.
Mahaney said he'll be watching for any changes to Yahoo's
previously stated goal of signing up 7 million to 7.5 million
fee-paying subscribers in 2004, following Web search service
Google Inc.'s splashy announcement last week that it plans to
offer a competing free e-mail service called Gmail.
For the second quarter, Yahoo is forecasting earnings of 12
cents a share and revenue, excluding traffic acquisition costs,
of $534.05 million.
In order for shares to continue rising following earnings,
Yahoo will have to post results and guidance that substantially
exceed street expectations, analysts said.
Copyright 2004, Reuters News Service
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