Yahoo! (YHOO) Q3 Earnings Point to a Pullback
All things considered, Yahoo! (YHOO) could have done worse last quarter. On the flipside, it could have done better as well. The market saw the glass as half-empty rather than half-full, however, in that YHOO shares were down in after hours trading following the internet company's post-close report of Q3 results.
All told, Yahoo earned 15 cents per share on revenue of $1.23 billion. Both fell short of estimates; analysts were calling for a profit of 17 cents per share of YHOO, with top-line estimates of $1.26 billion were on target. The comparisons to year-ago revenue of $1.15 billion were favorable, though earnings plunged on a year-over-year basis - EPS totaled 52 cents per share in the third quarter of 2014. Investors are advised to use caution in weighing the then-and-now measures, however, as several unusual adjustments have been and continue to be made.
CEO Marissa Mayer said of numbers “...were largely within our forecasted expectations — our GAAP revenue grew 7% year-over-year and our Mavens revenue grew 43%.... As we move into 2016, we will work to narrow our strategy, focusing on fewer products with higher quality to achieve improved growth and profitability... In addition to sharpening focus within core business growth, our top priority is the planned spinoff of Aabaco Holdings [its Alibaba (BABA) stake]. This is an important moment for the Company, and we continue to strive to complete the spin as quickly as we can.”
YHOO shares are down 35% year-to-date, and though the past three weeks suggested shares were finally ready snap the downtrend, this week's weakness (and the bearish response to earnings in particular) now implies the bears are taking control again. Still, current and would-be traders should note that a significant support level is in place around $29.00, and could quell any pullback before it has a chance to get going in earnest.
YHOO Weekly Chart
