Yahoo's (Nasdaq: YHOO) third quarter results just snuck by expectations. The results weren't enough to ease investors fears the company is being impacted by the dot-com slow down. Shares fell 19 percent early Wednesday.
Shares were down 16.06 to 66.63. The company announced after Tuesday's market close that earnings were $81.1 million, or 13 cents per share, excluding special charges. First Call's survey of 31 analysts predicted a profit of a dozen cents per share.
Like investors, analysts were mixed.
WR Hambrecht & Co. reiterated a "buy" rating on the stock Wednesday, and raised estimates just slightly.
"We anticipate the stock will outperform the S&P 500 over the next 12 months," said Derek Brown in a research note. He will continue to moderate his stance based on valuation considerations and apparent softness in the online ad market, Brown added. While the results indicate that Yahoo! is weathering the storm, the fact remains that it's still in the middle of a nasty storm, Brown said. He raised estimates by the smallest margin in WR Hambrecht's history of covering the company.
Revenue estimates for 2000 and 2001 were raised to $1.12 billion and $1.44 billion, up just slightly from $1.09 billion and $1.44 billion. Pro forma operating earnings estimates are 48 and 59 cents a share, up fractionally from 47 and 57 cents a share. The revenue estimate for 2002 is $1.73 billion and earnings are expected t o be 71 cents a share.
Credit Suisse First Boston analyst Jamie Kiggen started coverage of Yahoo Inc. (Nasdaq: YHOO) Wednesday with a "hold" rating and a six-to-12 month price target of $100.
"Despite posting a high quality September quarter and beating consensus numbers, Yahoo!'s guidance continues to be cautious due to a challenging near-term business environment,'' Kiggen wrote in a research note.
"Our $100 target still suggests good upside potential if the stock settles at a level significantly lower than yesterday's close,'' Kiggen added. ``So investors should view our Hold rating as one under daily review.''