Yahoo shares decline after Q1 results
Net pacesetter lifts its outlook for the year
By Bambi Francisco, CBS.MarketWatch.com
Last Update: 9:35 AM ET April 11, 2002
SUNNYVALE, Calif. (CBS.MW) --Yahoo, the widely watched barometer for the health of the
Internet advertising market, reported its sixth straight quarterly loss late Wednesday but
raised its outlook for the year.
Shares of Yahoo (YHOO: news, chart,
profile) fell 9 percent to $16.74 on
Thursday.
Yahoo said it lost $53.6 million, or 9
cents a share, in the first quarter.
Excluding a one-time charge for the
write-off of goodwill from prior
acquisitions, the company earned $10.5
million, or 2 cents per share. That
per-share figure met the expectation of
analysts surveyed by Thomson
Financial/First Call.
Yahoo generated $193 million in revenue
for the quarter. The results included
HotJobs, which had roughly $100 million
in sales last year and was recently
acquired by Yahoo. Analysts expected
$175 million, plus roughly $11 million
from the addition of HotJobs. U.S.
Bancorp Piper Jaffray projected
combined sales of $191 million.
First-quarter sales last year hit $180
million while fourth-quarter sales hit $188
million.
Global sales weak, non-ad sales
up
Yahoo also raised its outlook for 2002
even though sales outside of the U.S.,
which accounts for 14 percent of total
revenue, appear tenuous. Yahoo CFO
Sue Decker said that international sales
dropped 13 percent to $26 million from
the fourth quarter. Decker said that the
economic issues that took hold in the
U.S. shifted to the global markets in the
second half of last year.
A global economic slump has been the
primary reason Yahoo and other
ad-supported companies have sought to
make money through other means. This
was the reason behind the HotJobs
purchase, which closed in February.
With the HotJobs job recruiting
business, Yahoo now believes it can
generate sales between $870 million and $910 million. This is up from the estimated $725 million and
$750 million given in January. The new outlook includes HotJobs, which Yahoo estimates could
generate between $90 million and $100 million in sales for the full year.
"We transformed our business model to identify key priorities," said Terry Semel, Yahoo's CEO. "And
those are gaining traction."
Indeed, marketing/advertising accounts for 63 percent of total sales compared to 90 percent at the
start of 2001, Semel said. Fees and listings could "drive sales even if the ad slump continues," he
said.
The HotJobs acquisition and the company's partnership with Overture (OVER: news, chart, profile)
helped to alleviate Yahoo's dependence on advertising. By the second half of 2002, Yahoo expects
between $20 million and $30 million in sales from its co-branding Internet access venture with SBC
(SBC: news, chart, profile). It's unclear, however, whether Yahoo can count on its partnership with
Overture (OVER: news, chart, profile), which brings in an estimated $12 million and $15 million in
revenue a quarter. The partnership, which is a revenue-share from small businesses seeking to pay to
be listed online, is a significant relationship as it is enabling Yahoo to boost this quarter's sales
objective.
Yahoo expects second-quarter sales between $205 million and $225 million. This includes revenue
from Yahoo's relationship with Overture as well as a $20 million to $25 million contribution from
HotJobs.
Yahoo's agreement with Overture continues through the end of June and company management did
not say whether they'd renew the deal or provide the service itself.
Outlook
Second-quarter cash flow (earnings before interest, taxes, depreciation, amortization and stock
compensation expense) is expected to be between $23 million and $33 million for the second quarter
and between $105 million and $130 million for the full year 2002. In January, Yahoo estimated
EBITDA to come in between $70 million and $100 million.
For 2002, Yahoo was expected to generate $797.70 million in sales,
excluding sales from HotJobs. This is up from $717 million last year. For
2003, analysts projected Yahoo to generate $992 million. On the bottom
line, Yahoo is currently expected to earn 10 cents a share, up from 7
cents last year. Those earnings are expected to grow to 20 cents in 2003
Net pacesetter lifts its outlook for the year
By Bambi Francisco, CBS.MarketWatch.com
Last Update: 9:35 AM ET April 11, 2002
SUNNYVALE, Calif. (CBS.MW) --Yahoo, the widely watched barometer for the health of the
Internet advertising market, reported its sixth straight quarterly loss late Wednesday but
raised its outlook for the year.
Shares of Yahoo (YHOO: news, chart,
profile) fell 9 percent to $16.74 on
Thursday.
Yahoo said it lost $53.6 million, or 9
cents a share, in the first quarter.
Excluding a one-time charge for the
write-off of goodwill from prior
acquisitions, the company earned $10.5
million, or 2 cents per share. That
per-share figure met the expectation of
analysts surveyed by Thomson
Financial/First Call.
Yahoo generated $193 million in revenue
for the quarter. The results included
HotJobs, which had roughly $100 million
in sales last year and was recently
acquired by Yahoo. Analysts expected
$175 million, plus roughly $11 million
from the addition of HotJobs. U.S.
Bancorp Piper Jaffray projected
combined sales of $191 million.
First-quarter sales last year hit $180
million while fourth-quarter sales hit $188
million.
Global sales weak, non-ad sales
up
Yahoo also raised its outlook for 2002
even though sales outside of the U.S.,
which accounts for 14 percent of total
revenue, appear tenuous. Yahoo CFO
Sue Decker said that international sales
dropped 13 percent to $26 million from
the fourth quarter. Decker said that the
economic issues that took hold in the
U.S. shifted to the global markets in the
second half of last year.
A global economic slump has been the
primary reason Yahoo and other
ad-supported companies have sought to
make money through other means. This
was the reason behind the HotJobs
purchase, which closed in February.
With the HotJobs job recruiting
business, Yahoo now believes it can
generate sales between $870 million and $910 million. This is up from the estimated $725 million and
$750 million given in January. The new outlook includes HotJobs, which Yahoo estimates could
generate between $90 million and $100 million in sales for the full year.
"We transformed our business model to identify key priorities," said Terry Semel, Yahoo's CEO. "And
those are gaining traction."
Indeed, marketing/advertising accounts for 63 percent of total sales compared to 90 percent at the
start of 2001, Semel said. Fees and listings could "drive sales even if the ad slump continues," he
said.
The HotJobs acquisition and the company's partnership with Overture (OVER: news, chart, profile)
helped to alleviate Yahoo's dependence on advertising. By the second half of 2002, Yahoo expects
between $20 million and $30 million in sales from its co-branding Internet access venture with SBC
(SBC: news, chart, profile). It's unclear, however, whether Yahoo can count on its partnership with
Overture (OVER: news, chart, profile), which brings in an estimated $12 million and $15 million in
revenue a quarter. The partnership, which is a revenue-share from small businesses seeking to pay to
be listed online, is a significant relationship as it is enabling Yahoo to boost this quarter's sales
objective.
Yahoo expects second-quarter sales between $205 million and $225 million. This includes revenue
from Yahoo's relationship with Overture as well as a $20 million to $25 million contribution from
HotJobs.
Yahoo's agreement with Overture continues through the end of June and company management did
not say whether they'd renew the deal or provide the service itself.
Outlook
Second-quarter cash flow (earnings before interest, taxes, depreciation, amortization and stock
compensation expense) is expected to be between $23 million and $33 million for the second quarter
and between $105 million and $130 million for the full year 2002. In January, Yahoo estimated
EBITDA to come in between $70 million and $100 million.
For 2002, Yahoo was expected to generate $797.70 million in sales,
excluding sales from HotJobs. This is up from $717 million last year. For
2003, analysts projected Yahoo to generate $992 million. On the bottom
line, Yahoo is currently expected to earn 10 cents a share, up from 7
cents last year. Those earnings are expected to grow to 20 cents in 2003
