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Yahoo Net Earnings Down 91% - Loeb Chops, 12 Gurus Hold

October 22, 2013 | About:
Sally Jones

Sally Jones

49 followers
In the third quarter of 2013, Daniel Loeb of Third Point LLC chopped his 62 million shares of Yahoo! Inc. (YHOO) to a little over 20 million shares. In the same quarter, Yahoo’s net earnings are down 91% at $297 million (GAAP) year-over-year. The company made $3.16 billion in the same quarter a year ago. Here’s a company update and billionaire and insider trading details:

Yahoo! Inc. (YHOO)

Up 103% over 12 months, Yahoo! Inc. has a market cap of $34.53 billion; its shares were traded at around $33.84 with a P/E ratio of 9.70 and a P/B of 2.50.

Founded in 1994, Yahoo! Inc. is an internet content and digital media company. Through its proprietary technology, the company delivers personalized digital content and experiences, via the Internet and electronic devices. As a mission, the company is focused on making the user’s daily internet and device habits inspiring and entertaining while connecting advertisers with audience. Headquartered in Sunnyvale, California, Yahoo! Inc. has offices located throughout the Americas, Asia Pacific, and the Europe, Middle East and EMEA regions.

Yahoo! Inc. reported revenue of $1.13 billion for the third quarter of 2013, down 5% year over year. The company’s adjusted EBITDA was reported at $331 million for the third quarter, marking a decrease of 19% year over year. Also in the third quarter of 2013, Yahoo reported $0.28 for net earnings per diluted share, down from $2.64 in the third quarter of last year. Down by 7%, year over year, Yahoo’s display revenue in third quarter was reported at $470 million; the company’s search revenue was off by 8%, at$435 million for the third quarter, down from $473 million in the same quarter a year ago. Yahoo also reported that its number of ads sold was up by 1% year over year. Yahoo’s ‘paid clicks’ increased by 21%, but its ‘price-per-click’ was down by 4%, compared to the same quarter a year ago. These numbers do not include the company’s Korea numbers. All reporting is GAAP.

Yahoo’s CEO Marissa Mayer commented on the company’s quarterly performance in a company press release, “I’m very pleased with our execution, especially as we’ve continued to invest in and strengthen our core business. In Q3, we launched new user experiences across many of our digital daily habits -- Yahoo Screen, My Yahoo, Fantasy Sports, and more. Now with more than 800 million monthly users on Yahoo -- up 20 percent over the past 15 months -- we're achieving meaningful increases in user engagement and traffic.”

Yahoo’s balance sheet shows around $3.2 billion as of Sept. 30, 2013, down from $6 billion at year’s end in 2012. During the third quarter of 2013, Yahoo Inc. repurchased 59 million shares for $1.6 billion. The company used $163 million for acquisitions, including Bignoggins, Qwiki, Xobni, Admovate, Ztelic, Lexity, Rockmelt and IQ Engines.

Yahoo’s CFO Ken Goldman commented in a company press release: “In Q3, we generated free cash flow of $249 million and returned an additional $1.7 billion to shareholders through buybacks.”

Regarding its IPO of Alibaba and the maximum number of Alibaba shares that Yahoo is required to sell, Yahoo! Inc. also reported agreement to an amendment to the share repurchase and preference sale agreement with Alibaba Group to reduce the maximum number of shares from 261.5 million shares to 208 million shares.

Guru Action: As of the third quarter of 2013, 12 gurus hold YHOO, and there is very active insider selling in 2013.

In the third quarter, top guru stakeholder, Daniel Loeb reduced his position by 66.77%, selling shares at an average price of $27.86 per share. His current shares remain at 20,600,000 or 2.02% of shares outstanding.

Check out this remarkable trading history of gains:

1382466276877.png

Across a five-year trading history, Daniel Loeb averaged a gain of 137% on 73,000,400 shares bought at an average price of $14.36 per share. Loeb has also gained of 62% on 11,000,400 shares sold at an average price of $21.06 per share.

Track historical pricing, revenue and net income:

1382468810179.png

Check here for detailed GuruFocus analysis of YHOO.

The updated portfolio of Daniel Loeb of Third Point LLC lists 33 stocks, 6 of them new, with a total value of $4.41 billion, and a quarter-over-quarter turnover of 26%. The portfolio’s top three sector weightings are consumer cyclical at 12%, financial services at 10.1% and communication services at 8.1%.

Daniel Loeb is founder of Third Point LLC, a New York based hedge fund. Loeb’s average 12-month return is 22.8%.



Check out Daniel Loeb’s complete third quarter activity.

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 3.5/5 (2 votes)

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