Yahoo! Inc. (YHOO), AT&T Inc. (T): 4Q Earnings Preview


Yahoo! Inc. (NASDAQ:YHOO) and AT&T Inc. (NYSE:T) will report their earnings on Tuesday. Both these tech giants will be closely monitored by the experts and analysts especially after an eventful earning from Apple Inc. (NASDAQ:AAPL), where the company shares declined sharply despite posting record sales.

Subsidiary companies key for Yahoo

Yahoo! Inc. (NASDAQ:YHOO) is expected to post its fourth quarter and full year earnings on January 28. The stock of the company did not perform well in the past year as it was more focused towards investment in associate companies Alibaba and Yahoo Japan. As the result of increasing investment, the core ad revenues of the company started declining. In the third quarter, revenue came down 7% year over year to $452 million, and search ad revenues dropped 8% to $418 million.

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Yahoo! Inc. (NASDAQ:YHOO) is continuously designing and launching new products to make the user experience even better, and increase its unique visitor count. Even after a lot of efforts Yahoo could not monetize its websites effectively. Recently, the company unveiled a new ad tech platform to take further the monetization rates. In the recent earnings, the analysts are concentrated on search and display ads revenue divisions. Also, the subsidiary companies would contribute to the strong growth, which will trickle down the bottom line.

Display ads and search ads division contribute 13% and 14% of its value, respectively, according to Forbes estimate. Both the segments of Yahoo have experienced a drop in revenue. Yahoo! Inc. (NASDAQ:YHOO) is expected to put more thrust on developing and delivering content on its mobile platform.

iPhone numbers to be watched closely

AT&T Inc. (NYSE:T) will report its fourth-quarter earnings on Tuesday after the market closes, and will also hold a conference call to discuss the results. Analysts expect the company to post earnings of earn $0.50 per share against $0.44 per share last year. The numbers from AT&T have always been close to estimates by the Wall Street analysts. For the last 16 quarters, the range of EPS has been from three cents less to four cents more than expectations. In the previous 16 results, the company gave eight bullish surprises, five in-line results and three bearish surprises.

For the third quarter, the company reported a 2.2% rise in revenues backed by impressive wireless revenue, especially on the data side. For the quarter, the carrier gained 989,000 wireless subscribers including more than a third them being post-paid customers. Smartphone sales for the quarter came in at 6.7 million.

AT&T Inc. (NYSE:T) shares are witnessing the worst times dropping 8% since late October. Analysts will be closely monitoring the smartphone sales especially the volume contributed by Apple’s iPhone.