Yahoo earnings what to watch

Apr 15, 2013, 2:24pm PDT

Yahoo first quarter earnings: What to watch

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Preeti Upadhyaya

Technology Reporter- Silicon Valley Business Journal

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Yahoo reports first quarter earnings on Tuesday.
Wall Street is expecting $1.1 billion in revenue (down from $1.22 billion year-over-year) and 25 cents earnings per share (up about 4 percent year-over-year). For the year, the Street expects to see revenue of $4.58 billion and $1.09 earnings per share.
As for the earnings themselves, Charles King, president and principal analyst at Pund-IT, doesn’t expect a huge difference from what Yahoo reported last quarter largely because many recent changes at the company will take a while to have a material impact on the company.
“We may be seeing a firmer bottom line, but that’s mostly going to relate to employee downsizing and pulling back on some products and services,” King says.
One key area to watch is the company's advertising division, particularly display ads. The company has struggled here, losing market share to its advertising rivals - particularly Google and Facebook. Its search ad market share has also fallen.
Another area to watch is whether the company will be as acquisition-happy as its been in the first quarter. CEO Marissa Mayer said in the last earnings call that Yahoo will be making a lot of significant investments in the first half of 2013. Since coming on board, Mayer has made six acquisitions, many of them acquirihires (learn about all of them here).
And of course, as the dust settles over Mayer’s February decision to ban telecommuting, the issue will surely come up again during tomorrow’s earnings announcement.
Whether or not a change in headcount will show up in the books tomorrow, King says, “If they’re smart, they’ll talk about the telecommuting issue themselves before someone asks about it. I’m almost sure the subject will come up.”