Yahoo shares dive after 2nd-quarter results show tepid revenue growth
By APWednesday, July 21, 2010
Ahead of the Bell: Yahoo shares dive
NEW YORK — Shares of Yahoo Inc. tumbled in premarket trading Wednesday after second-quarter results showed tepid revenue growth.
“Yahoo is still a work in progress,” Jefferies & Co. analyst Youssef Squali told investors in a note.
Squali still has a “Buy” rating on Yahoo shares but told clients “it will require patience for the stock to work in the end.”
The turnaround effort at Yahoo led by CEO Carol Bartz showed signs of stalling in the second quarter.
Cost cutting helped lift Yahoo’s earnings more than 50 percent to $213 million. But revenue grew only 2 percent to $1.6 billion — well below the 24 percent growth that rival Google Inc. booked last week.
Yahoo will have to improve performance to keep its shares from lagging behind its rivals, FBR Capital Markets analyst Heath Terry said in a note.
He kept an “Underperform” rating on the stock and cut his price target to $15 from $18.
Yahoo shares fell $1.01, or 6.6 percent, to $14.19 ahead of regular trading.
