SAN FRANCISCO: Yahoo Inc's fourth-quarter revenue forecast disappointed Wall Street on Tuesday, Oct 19, as the Web portal struggles to revitalize growth and stave off rivals such as Google Inc and Facebook.
Investors have pressured Yahoo, the leader in display advertising, and Chief Executive Carol Bartz to deliver growth and revive its stock price, amid talk that private equity firms are exploring a buyout of the company.
Executives declined to comment on those reports on Tuesday.
"We feel pressure to execute on our plan, as we should. We need to deliver on our plan to deliver shareholder value. And when we do that the share price will take care of itself," Chief Financial Officer Tim Morse told Reuters.
"We're doing a terrific job in some areas. In others, we're clearly in transition, and I think it's fair to want to see more from us in the future before people believe fully in the (growth) targets."
Yahoo projected fourth-quarter revenue, excluding traffic acquisition costs, of $1.125 billion to $1.225 billion. Analysts were looking for revenue of $1.26 billion, according to Thomson Reuters I/B/E/S.
"The revenues were a little bit light and the guidance is also sort of uninspiring," said Clay Moran, an analyst at the Benchmark Company.
Moran said the 17 percent revenue growth from online display ads on Yahoo's owned and operated websites during the third quarter was weaker than expected.
Net income in the three months ended Sept. 30 was $396.1 million, or 29 cents a share, compared with $186 million, or 13 cents a share, in the year-ago period. But Yahoo said its earnings included a 13 cent benefit from the sale of its "HotJobs" Web service. Analysts had expected earnings of 15 cents a share.
Net revenue, which excludes revenue it shares with website partners, totaled $1.12 billion in the third quarter, compared with $1.13 billion in the year-ago period and slightly below the $1.13 billion expected by analysts.
Yahoo shares have gained more than 6 percent since reports last week that a variety of private equity firms, including Silver Lake Partners, were exploring a potential buyout of the company -- possibly in partnership with the likes of AOL Inc or News Corp.
Yahoo shares held steady in extended trading after closing 2.7 percent lower at $15.49 on Nasdaq.
"It would make sense if they did something with AOL because the business is at the point where it's a game of scale," said UBS analyst Brian Pitz.
"Having the largest amount of display advertising ... and ability to take out a large amount of costs, could be pretty compelling, but its easier said then done. There's a lot of politics involved and reasons why it wouldn't happen." - Reuters
Investors have pressured Yahoo, the leader in display advertising, and Chief Executive Carol Bartz to deliver growth and revive its stock price, amid talk that private equity firms are exploring a buyout of the company.
Executives declined to comment on those reports on Tuesday.
"We feel pressure to execute on our plan, as we should. We need to deliver on our plan to deliver shareholder value. And when we do that the share price will take care of itself," Chief Financial Officer Tim Morse told Reuters.
"We're doing a terrific job in some areas. In others, we're clearly in transition, and I think it's fair to want to see more from us in the future before people believe fully in the (growth) targets."
Yahoo projected fourth-quarter revenue, excluding traffic acquisition costs, of $1.125 billion to $1.225 billion. Analysts were looking for revenue of $1.26 billion, according to Thomson Reuters I/B/E/S.
"The revenues were a little bit light and the guidance is also sort of uninspiring," said Clay Moran, an analyst at the Benchmark Company.
Moran said the 17 percent revenue growth from online display ads on Yahoo's owned and operated websites during the third quarter was weaker than expected.
Net income in the three months ended Sept. 30 was $396.1 million, or 29 cents a share, compared with $186 million, or 13 cents a share, in the year-ago period. But Yahoo said its earnings included a 13 cent benefit from the sale of its "HotJobs" Web service. Analysts had expected earnings of 15 cents a share.
Net revenue, which excludes revenue it shares with website partners, totaled $1.12 billion in the third quarter, compared with $1.13 billion in the year-ago period and slightly below the $1.13 billion expected by analysts.
Yahoo shares have gained more than 6 percent since reports last week that a variety of private equity firms, including Silver Lake Partners, were exploring a potential buyout of the company -- possibly in partnership with the likes of AOL Inc or News Corp.
Yahoo shares held steady in extended trading after closing 2.7 percent lower at $15.49 on Nasdaq.
"It would make sense if they did something with AOL because the business is at the point where it's a game of scale," said UBS analyst Brian Pitz.
"Having the largest amount of display advertising ... and ability to take out a large amount of costs, could be pretty compelling, but its easier said then done. There's a lot of politics involved and reasons why it wouldn't happen." - Reuters
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