Strong Q2 results expected from Yahoo
Written on July 21, 2010
Yahoo Inc. investors get another update on CEO Carol Bartz' turnaround efforts at the Internet giant on Tuesday when second quarter earnings are posted.
Analysts expect earnings will come in around 14 cents per share on revenue of $1.16 billion after subtracting Yahoo's advertising commissions.
That would be the Sunnyvale company's (NASDAQ:YHOO) best quarter since Bartz took over 18 months ago, clamping down on costs and replacing a number of top executives.
One key area investors will focus on is how Yahoo's advertising revenue growth holds up. Google Inc. (NASDAQ:GOOG) posted a 24 percent increase in revenue last week, although its similarly strong earnings came in a bit below projections.
If Yahoo, which relies on online banner ads for most of its revenue, shows similarly strong growth in ad spending, it's believed that Bartz' belt-tightening will help the company exceed projections for the quarter.
Citigroup analyst Mark Mahaney wrote in his preview of Yahoo results that, “In particular, we believe that the robust and accelerating Google U.S. revenue results, based on both Search and Display growth, provide a broad positive market read-thru for Yahoo.”
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