Watch stocks you care about
The single, easiest way to keep track of all the stocks that matter...
Your own personalized stock watchlist!
It's a 100% FREE Motley Fool service...
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So what: Unfortunately for investors, today's earnings report isn't as cut-and-dried as "Yahoo! beats." In fact, it was a very mixed report, with Yahoo!'s core ad business falling yet again, all while digital ad sales are growing in the U.S. by double digits. For the quarter, Yahoo! reported a slight drop in revenue to $1.07 billion, which was below the Street's expectations, but delivered 46% net income growth from cost-cutting measures that drove adjusted EPS to $0.35, $0.05 better than expected. On the downside, Yahoo! also lowered its full-year revenue forecast to a range of $4.45 billion to $4.55 billion from its previous forecast that called for $4.5 billion to $4.6 billion in revenue.
Now what: The real driver appears to be the strong growth at Alibaba, of which Yahoo! still holds a 24% stake. Expected to IPO sometime in 2014, some analysts have boosted their perceived valued of Alibaba to as high as $120 billion, which would translate into nearly $30 billion in value for Yahoo! In the meantime, Yahoo!'s ad business is continuing its downward spiral despite CEO Marissa Mayer's best efforts to make small, but earnings accretive, acquisitions. Despite the promise that Alibaba is showing, I have to question whether Yahoo! has anything left in the tank other than its Alibaba investment. As of now, I wouldn't say I'm all too impressed.
Tired of watching stocks like Yahoo! struggle with ad growth while other companies are putting up robust growth figures? Motley Fool co-founder David Gardner, founder of the No. 1 growth stock newsletter in the world, has developed a unique strategy for uncovering truly wealth-changing stock picks. And he wants to share it, along with a few of his favorite growth stock superstars, WITH YOU! It's a special 100% FREE report called "6 Picks for Ultimate Growth." So stop settling for index-hugging gains... and click HERE for instant access to a whole new game plan of stock picks to help power your portfolio.