After today’s close we’ll get earnings out of Yahoo! Inc. (NASDAQ: YHOO). First Call has estimates pegged at $0.12 EPS on $1.37 Billion in revenues. For next quarter estimates are $0.12 EPS on $1.4 Billion in revenues and Fiscal December-2008 estimates are $0.48 EPS on $5.72 Billion in revenues. As a reminder all revenue estimates are ex-TAC revenues (traffic acquisition costs).
We recently ran three price/value scenarios before Yahoo! capitulated to Icahn to show three different value scenarios with an at-market scenario, and one each for above and below current prices.
Frankly, there is an over-reporting aspect around Yahoo! and all the merger coverage that may actually make this earningsreport far less material than past earnings when there was only theissue of how it would compete against Google and grow earnings.
Analysts currently have a price target of between $24 and $25 pershare. Options traders appear to be braced for a move of approximately$1.25 in either direction. Its chart is also important in the analysisbecause shares are technically back to within 10% of 10-year lows fromright before the merger offer from Microsoft came in.
Frankly, even if the company tanks on its earnings it is likely thatWall Street will have to accept its excuse that the recent proxy fightand merger fighting distracted the company in more than 20 differentdirections outside of running day to day operations. That doesn’t meanWall Street will reward it, but it would be just as obvious as thecompany discussing the slowdown in online ad spending which other web giants have discussed.
As far as any other metrics, we’ll give this one a rest and just let the company report its own numbers.
Jon C. Ogg
July 22, 2008
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