Yahoo’s turnaround efforts don’t lift revenue

Print
Font Size:
Default font size
Larger font size

Posted: Wednesday, July 17, 2013 12:00 am

Yahoo! Inc. reported revenue that fell short of analysts’ estimates Tuesday as Chief Executive Officer Marissa Mayer struggles to lure advertisers to the largest U.S. Web portal one year after her hiring.

Sales, excluding revenue passed to partner sites, fell 1 percent to $1.07 billion, Sunnyvale, Calif.-based Yahoo said. Second-quarter profit, excluding some items, was 35 cents a share. Analysts had projected, on average, profit of 30 cents on revenue of $1.08 billion, according to data compiled by Bloomberg.

Mayer’s turnaround effort has so far focused on revamping products and improving worker morale at the expense of wooing advertisers, who continue to shift budgets to Google and Facebook. Her plan isn’t likely to recharge revenue growth until marketers see more users flocking to Yahoo sites, according to Mark Mahaney, an analyst at RBC Capital Markets.

“It’s a lengthy turnaround process,” said Mahaney, who is based in San Francisco and rates Yahoo’s shares outperform. “If she is successful, it will show up in the company’s fundamentals two to three years from now.”

Yahoo stock fell in late trading. The shares declined 1.7 percent to $26.88 at the close in New York, leaving them up 35 percent this year. Since Mayer’s first day as CEO on July 17, 2012, Yahoo has surged 72 percent.

Net income attributable to Yahoo rose 46 percent to $331.2 million, Yahoo said.

Yahoo’s share of the $17.5 billion market for display ads, its core business, will slip to 7.9 percent in 2013 from 9.2 percent last year, estimates researcher EMarketer Inc. Google will climb almost three percentage points to 18 percent, while Facebook will increase about two points to 17 percent, EMarketer said.

Coca-Cola

NEW YORK (AP) — Coca-Cola’s profit dipped in the latest quarter as the world’s largest beverage maker sold less soda in its flagship North American market.

The Atlanta-based company, which makes Dasani, Powerade and Sprite, said Tuesday that global volume rose 1 percent in the quarter, helped by sales in countries including Vietnam and Indonesia. But in North America, it fell 1 percent, including a 4 percent drop in sodas.

The company blamed the performance on bad weather and challenging economic conditions.

Coca-Cola has increasingly been relying on emerging markets for growth, given the expanding middle-class populations in such regions. Back at home, the company is battling a years-long decline in soda consumption and criticism that its drinks fuel obesity.

Johnson & Johnson

NEW BRUNSWICK, N.J. (AP) — Health care giant Johnson & Johnson’s second-quarter profit more than doubled, thanks to higher sales of medicines and medical devices as it recovers from recalls and manufacturing problems that cut into sales.

The comparison was made easier by last year’s quarter being hurt by $2.2 billion in charges for an acquisition, litigation and asset writedowns.

The maker of baby shampoo, prescription drugs and medical devices handily beat Wall Street expectations and raised its profit forecast by a couple of cents.

New Brunswick, N.J.-based J&J said net income was $3.83 billion, or $1.33 per share, up from $1.41 billion, or 50 cents per share, a year earlier.

Goldman Sachs

NEW YORK (AP) — Goldman Sachs said Tuesday that its second-quarter profit doubled and revenue jumped 30 percent, helped by gains in stock and bond underwriting and the bank’s own investments. But the hot topic for analysts who follow the bank was a set of impending capital rules and how they might affect the powerful New York investment bank.

Unlike JPMorgan Chase on Friday and Citigroup on Monday, Goldman did not release estimates of how close its current capital levels would come to meeting the proposed rules on the so-called leverage ratio. Chief Financial Officer Harvey Schwartz said the bank was comfortable with its position and knew how to adapt to changing environments. But he also said it was too early to release specifics.

To be sure, Goldman posted plenty of gains. Revenue from underwriting stocks and bonds soared 45 percent compared with a year ago. The bank’s own investments in stocks turned a profit, bouncing back from a loss a year ago.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


loading...

SPOTLIGHT »

Inside Business
To submit an announcement for "Inside Business", click here. For questions call (402) 444-1371 or e-mail announcements@owh.com.

World-Herald Alerts

Want to get World-Herald stories sent directly to your home or work computer? Sign up for Omaha.com's News Alerts and you will receive e-mails with the day's top stories.