Yahoo Earnings Preview

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Yahoo
YHOO
will release its earnings after the bell on Monday. Analysts expect a fourth quarter EPS of $0.28 on $1.21 billion in revenue. If recent history is any indication, the Sunnyvale, California firm will meet or exceed EPS estimates. In the previous four quarters, Yahoo has either met (once) or exceeded (three times) analysts' expectations on every occasion. From a shareholder perspective, the fourth quarter went well. After opening the quarter at $16, share prices rose steadily, closing at nearly $20 on the final day of December. That's a 24 percent gain over 3 months - nothing to be ashamed of.
Yahoo Makes Gains in Online TV Market
In September, Yahoo announced the launch of Madres de Hoy - a site presenting, among other things, videos for Latina moms. In October, the Internet giant announced a deal with CBS involving renaming entertainment newsmagazine The Insider to “omg! Insider” as a new, multi-platform entertainment news series. Then, in November, Yahoo announced an expanded, multi-year partnership to integrate its Broadcast Interactivity platform into Samsung 2012 Smart TVs. Rounding out the year in this regard, Yahoo and NBC agreed to team up for a multi-platform deal to cover sports, including original made-for-web video programs and live streaming. Look for fresh CEO Marissa Mayer to discuss the company's advances in online TV as a key talking point on Monday, as Yahoo has lagged behind the competition in modernizing its offerings.
Something to Chat About
Yahoo abandoned its once extremely popular chat rooms in December of 2012. Among other reasons, legal problems relating to sexual predators and competition from social media sites doomed the service,
as notes India Everyday
. However,
according to the Santa Cruz Sentinel
, the company purchased San Francisco video-conferencing startup OnTheAir in December. Yahoo intends the acquisition to boost its mobile offerings, as notes the Santa Cruz Sentinel. This is in line with statements by Mayer that the company will increasingly focus on mobile technology.
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Performance of New Leadership
From the mid-third quarter on, the Internet giant has added several key employees, including: Marissa Mayer: President, CEO and Member of Board Kathy Savitt, Chief Marketing Officer Jacqueline Reses: Executive VP, People and Development Ken Goldman: CFO Henrique de Castro: COO Look for the company to emphasize its most recent moves as it attempts to boost investor confidence in the new regime.
Mexican Courts Rain on Yahoo's Parade?
A November judgment against the firm could be problematic in the future. A Mexican court entered a non-final judgment against Yahoo for breach of contract, breach of promise and lost profits arising from contracts related to a yellow pages listings service. The price tag was a hefty $2.7 billion - over twice Yahoo's expected fourth quarter earnings. Yahoo, however, plans to appeal the judgment. This is something investors will want to keep on their radar as it plays out in the Mexican courts. Yahoo is trading around even at above $20 per share on Monday, near its 52-week high.
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