Yahoo Inc. Makes Some News…
Take a look at the last year chart of Yahoo. Now consider an AP news story about Yahoo today:
Yahoo Inc.’s fourth-quarter profit topped analysts’ expectations to end a recent pattern of financial letdowns, a breakthrough that the Internet bellwether hopes to build upon by accelerating the introduction of long-awaited improvements to the advertising system that fuels its growth. The pleasant surprise lifted Yahoo’s stock price by more than 5 percent late Tuesday after management shared the news. The Sunnyvale-based company said it earned $268.7 million, or 19 cents per share, during the final three months of 2006, traditionally the peak season for Web sites like Yahoo that depend on advertising for most of their revenue. The profit declined 61 percent from net income of $683.2 million, or 46 cents per share, at the same time in 2005, but the two quarters didn’t provide an apples-to-apples comparison. That’s because a one-time gain of $310 million boosted the 2005 results while the 2006 figures included stock option expenses that weren’t recorded on Yahoo’s books in the previous year. If not for certain tax benefits, Yahoo said it would have earned 16 cents per share, exceeding the average analysts’ estimate by 3 cents per share, according to Thomson Financial.
Given the 1 year chart and given today’s news…where does it seem logical that ‘long’ Yahoo makes sense? Isn’t there a disconnect between the chart movement and the “news” of today?
