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The Business Press Maven is trying to wrap his head around this one: Yahoo! YHOO missed expectations, and yet it didn't. Or, rather, the company missed one set of expectations (the one you can see) but, uh, surpassed another set (the one you can't). Or something like that. The confusion, I believe, stems from the business media's need to attach a meaningful-sounding explanation to a blip in Yahoo!'s stock price, a thinly traded after-hours bounce after the company reported post-market close Tuesday.
They Just Don't Get Yahoo! |
"Yahoo 2Q profit erodes but not as badly as feared:The article's second sentence gets right to work telling this tale of two expectations:
Yahoo's second-profit profit drops 18 percent but erosion isn't as bad as investors feared."
"While the results released Tuesday missed analyst expectations, the performance wasn't as bad as many investors feared after Internet search and advertising leader Google Inc. disappointed Wall Street with its second-quarter earnings last week."Whenever the business media try to force a story line, the first quote they generally use involves a strained metaphor, and here were had a little ditty about tasteless crackers:
"'They did better than the worst expectations,' said Canaccord Adams analyst Colin Gillis. 'It was a "rice-cracker" quarter. It didn't taste great, but it wasn't totally horrible either.'"As someone who uses both words and numbers, I've grown to distrust the first unless they're backed up by the second. What did this quote even mean? Wall Street, investors and the business media normally use the average of analyst expectations as a measure for expectations. Sure, the consensus estimate is flawed in multiple ways, but at least it cuts out the outliers -- the worst and best at the far end of the spectrum. So did Yahoo! mysteriously react to the very worst of the expectations? Or are we talking two sets here ... all to explain an after-market move that amounts to not much more than a rounding error?
Also, Pfizer tops estimates by a penny.
The debate over the potential cost focuses on a $25 billion worst-case scenario that may not happen.
And prices slipped 0.3% from April, according to the OFHEO's housing price index.
Yahoo! is among the most searched stocks on TheStreet.com. Here's what Cramer had to say about the stock recently.
Catch up on his thinking on the hottest topics of the past week.
Investors will have to deal with a Fed meeting and another flood of earnings and economic data.
Ensco International and Echelon have the potential to move higher in coming days.
See who made what calls.
The addition of video is helping telecom companies compete against cable and satellite companies.
The June West Texas Intermediate contract reflects selling pressure ahead of Tuesday's expiration. But stocks in the sector are generally trading higher.
See who made what calls.
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