This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Yahoo! Falls on Mixed Results, Weak Guidance (Update 1)

NEW YORK ( TheStreet) -- Yahoo! (YHOO) shares fell following second-quarter earnings that beat Wall Street estimates, but missed on the top line.

The Sunnyvale, Calif.-based company reported earnings of 35 cents a share on $1.07 billion in revenue excluding traffic acquisition costs, as revenue fell 1% year-over-year. Display revenue ex-TAC came in at $423 million, down 11% year-over-year, while search revenue ex-TAC was $403 million, a year-over-year increase of 5%.

On the conference call, CEO Marissa Mayer said there is a "chain reaction to growth - people, then products, then traffic, then revenue." She also noted that "pageview traffic achieved crossover in early June, and has grown year-over-year."

Analysts polled by Thomson Reuters expected Yahoo! to earn 38 cents a share on sales of $1.074 billion. Analysts surveyed by Estimize were looking for 34 cents a share on $1.09 billion in revenue.

"I'm encouraged by Yahoo!'s performance in the second quarter. Our business saw continued stability, and we launched more products than ever before, introducing a significant new product almost every week," Mayer said in the press release. "From the new Yahoo! News, the new Yahoo! Sports app, the redesigned Yahoo! search, the new Flickr, the new Yahoo! Mail for tablet, the Yahoo! Weather app, our new Yahoo! app with Summly - this quarter drove tremendous improvements in our product line and our users responded with increased usage and engagement."

On the call, Mayer said that she wants to see search become a bigger part of the business faster, and is taking the steps to help turn this segment of the business around. She noted that Yahoo!'s focus and future is on mobile, where the company has over 340 million mobile users.

The company ended the quarter with $4.8 billion in cash and investments, down from $6 billion at the end of 2012. There is $1.9 billion left on an existing $5 billion buyback program.

Yahoo! gave third-quarter guidance that was softer than what the market was expecting. For the third quarter, Yahoo! expects revenue excluding TAC to be between $1.06 billion and $1.1 billion. Analysts surveyed are expecting $1.12 billion.

The Mayer-led Yahoo! also cut fiscal 2013 estimates for Non-GAAP operating income. It now expects operating income to be between $900 million and $1 billion, down from a range of $1.05 billion to $1.1 billion. Full year revenue guidance was pared between $4.45 billion and $4.55 billion.

Shares of Yahoo! closed the session lower, off 1.68% to wind up at $26.88. The stock is moving lower in extended-hours trading, down 1.41% to $26.50 according to Nasdaq.com.

-- Written by Chris Ciaccia in New York

>Contact by Email.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7870 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs