Photo Credit: Esther Vargas
Yahoo! Inc. (YHOO) Information Technology – Internet Software & Services | Reports October 18, After Market Closes
Key Takeaways
Drama continues to follow Yahoo even after the sale of its core assets to Verizon earlier this year. The company is headed into its third quarter report surrounded by a cloud of uncertainty. It was recently revealed that 500 million accounts were stolen in a hack that occurred nearly 2 years ago. While it is not shocking that this information was only recently disclosed to the public, it is somewhat surprising that Verizon wasn’t apprised of what happened. This might not have a material impact on the print but has thrown a serious wrench into the Verizon deal and its reputation.
Analysts at Estimize are calling for earnings per share of 14 cents, down 12% from the same period last year. That estimate has increased 24% since the company’s most recent report in July. Revenue for the period is estimated to drop 14% to $858.58 million, marking a fourth consecutive quarter of double digit declines. The stock has surprisingly remained resilient, largely due to takeover talks starting from last year, with shares up 25% over the past 12 months.
Yahoo’s earnings woes have been well documented over the years. User engagement and ad revenue has continually declined as consumers shift their focus to more mainstream platforms particularly Facebook and Google. This has resulted in declines across the board most notably in core search and display revenue. Last quarter posted a 13% decline in search revenue and 21% in display compared to the second quarter of 2015. It won’t be shocking if this continues to drop given the massive breach on the platform.
