Yahoo! Inc. ’s sales are projected to dip below the $1 billion mark for the first time in over a decade, as the internet pioneer reports fourth quarter results after the close of trade on Tuesday.
The company is struggling to turn around its various businesses following years of anaemic growth. Shares of Yahoo closed Monday at $29.57. The stock is down 17 percent over the past 3 months, and 33 percent over the last one year.
Yahoo Earnings, Revenue Expectations are Subdued
The consensus of analysts polled by FactSet is for earnings per share of 13 cents, compared to 30 cents a year ago. Estimize expects Yahoo to earn 12 cents a share. The firm has missed the FactSet consensus in each of the last three quarters.
Revenue for the quarter is projected to come in at $948 million, versus $1.18 billion in the same period last year. Contributors to Estimize have forecast sales of $952 million. Yahoo’s revenue hasn’t fallen below the $1 billion mark since calendar year 2004.
All Eyes on Yahoo Conference Call
During the just concluded quarter, Yahoo! Inc. announced that it was mulling over strategic alternatives after calling off the planned spin off its remaining holdings in Alibaba. Among the options under consideration is a reverse spin off, which could see Yahoo transferring all of its assets outside of its Alibaba stake into a separate company.
Yahoo CEO Marissa Mayer, who was poached from Google in 2012 to help return the firm to a stable growth path, said the reverse spin off would provide “more transparency into the value of Yahoo’s business.”
SunTrust Robinson analyst Bob Peck says the earnings call could provide more clarity on the firm’s spin off and cost cutting plans. However, Susquehanna analysts reckon that instead of the spin off, investors would be more interested in knowing whether Yahoo is considering selling its core assets.
The Wall Street Journal recently reported that Yahoo is expected to soon announce the shutting down of several of its business units and a 15 percent reduction of its workforce. The conference call is scheduled to start at 5 PM ET on Tuesday.
Despite the recent headwinds that have weighed on the stock price, earnings and revenue, analysts remain bullish on Yahoo! Inc. . According to a survey of nearly 40 analysts conducted by FactSet, the average rating on the stock is the equivalent of a “buy.” The 12-month target price is $41.33, which roughly translates to a 40 percent upside from Monday’s closing price.