took another hit today after
became the latest
firm to caution that ongoing weakness in online advertising would hurt the Internet company.
The firm, in a report by Derek Brown, lowered its rating on Yahoo to neutral from buy, citing "near-term challenges and uncertainties" surrounding the company and its market.
Shares of Yahoo recently dipped 5.50%, or $2.06, to $35.44 in trading on the
W.R. Hambrecht doesn't expect Yahoo to exceed fourth-quarter estimates and added that "there is a legitimate chance" the company could fall short in the quarter. The firm's estimates call for fourth-quarter revenue of $316 million and earnings of 13 cents a share, compared with revenue of $201.1 million and earnings of 13 cents a share in the same period last year.
Brown said the company's full-year 2001 projections are "also in question, given suspicions that weakness in the ad market may continue well into next year." Brown didn't lower his 2001 estimates of $1.44 billion in revenue and earnings of 59 cents a share, but cautioned that he "will likely do so" after Yahoo reports fourth-quarter results in early January.
Brown, who also said that traditional advertising-based businesses "are beginning to feel the pain," added that his rating cuts reflect near-term conditions, not long-term questions about the viability of online advertising. He said he believes that "mainstream advertisers will aggressively follow consumers online."
analyst Henry Blodget cut his first- and second-quarter expectations on Yahoo but said he expects growth to accelerate "modestly" through the year.