Q1 Preview: Can Yahoo! (YHOO) Results Continue to Beat as Push for Turnaround Gets Underway?

Traders are buying shares of Yahoo! (Nasdaq: YHOO) Tuesday afternoon ahead of the company's first-quarter earnings report, due after the market close. The stock seems to be holding above the $15 level.

Analysts on the Street are expecting Yahoo! to report quarterly earnings of 17 cents per share on sales of $1.06 billion. If the company can hit these estimates, profit would be flat from the same quarter last year but down about 30 percent from the 24 cents per share reported last quarter.

Data from StreetInsider.com's Earnings History page suggests Yahoo! has beaten analyst's estimates by nearly 10 percent over the last four quarters.

The Street is mostly neutral on Yahoo! shares heading into the quarterly report. Bloomberg data shows nine firms rate the stock a Buy, 23 firms rate the stock at Hold or the equivalent, and three firms suggest selling the stock. Analyst price targets currently range from $14 to $22.

Shares of Yahoo! have fallen about 6 percent so far in 2012, reversing a second-half 2011 rally.

Analyst Comments:

• Deutsche Bank - Recently adjusted FY12 EPS estimate from 80 cents to 81 cents and sales from $4.341 billion to $4.272 billion following news on April 4th of a restructuring. The firm said the job cuts were the "first step in the CEO's attempt to right-size the business." Although Deutsche Bank liked the move, the firm said "we believe there is more work to be done in terms of driving revenue growth."
  
  The firm said it will be focused on online advertising spending by large brand marketers, "especially as the ad market begins to show signs of recovery."
  
  Deutsche Bank maintains a Hold rating and $15 price target into Yahoo!'s results.
  
  
• BGC Partners - Looking for EPS of 19 cents on sales of $1.059 billion. BGC is expecting continued pressure on display growth amid "audience-buying efforts from Google, and competition from Facebook..." The firm called the current transition away from Search as "a painful process in 2012."
  
  Related to the company's turnaround, BGC felt similarly as Deutsche Bank, saying: "layoffs and restructuring announced, now its time for vision."
  
  The firm maintains a Hold rating on the stock.

Yahoo! typically reports just after the market close, usually not later than 4:05pm ET. Stay tuned to our Earnings category to get the breaking news within seconds of the official release. Yahoo! will host its conference call at 5pm ET. The live Webcast of Yahoo!’s earnings call can be accessed at http://investor.yahoo.com.

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