Stocks Mentioned
Yahoo! (YHOO)
Apple (APPL)
TRANSCRIPT
SUSIE GHARIB: A big splashy earnings report tonight from Yahoo (NASDAQ:YHOO)!’s new CEO Marissa Mayer, in the job only three months, announced quarterly profits and revenues that came in higher than analyst estimates. Yahoo (NASDAQ:YHOO)! shares surged 3 percent to around $16 a share in after hour’s trading. Here are the numbers of that report—earnings per share up $0.35, $0.10 above estimates. Revenues came in just over $1 billion. That was slightly more than forecast. While the company is still struggling, Mayer said she’s taking steps for to position Yahoo (NASDAQ:YHOO)! for long-term success. Joining us now with more about those Yahoo (NASDAQ:YHOO)! numbers, Colin Gillis. He’s senior technology analyst at BGC. So Colin, Marissa Mayer was very upbeat on that analyst call this afternoon. What is she going to do and do you buy into it?
COLIN GILLIS, SR. TECH. ANALYST, BGC FINANCIAL: Yeah, the wheels did not come off the bus on Yahoo (NASDAQ:YHOO)! and that was very encouraging for investors. This is a company that still is facing some significant challenges. Revenue was flat. They’re still struggling to find growth but she did paint the clear message that we all like about how she was going to turn around, focusing in on the opportunities on search, making sure that she brings in talented employees and trying to chase after the mobile opportunity as well.
GHARIB: You know, everybody talks about monetizing mobile. There’s a lot of competition out there. Can she pull it off?
GILLIS: You know, listen, when you have the quantity of the users that Yahoo (NASDAQ:YHOO)! still has, that’s its largest asset, its non-cash asset that it has. You talk about north of 700 million worldwide, use Yahoo (NASDAQ:YHOO)! every single month. So yes, if she’s building good products, people will use it.
GHARIB: So the stock really traded up in after hour’s trading. Would you buy Yahoo (NASDAQ:YHOO)! at $16?
GILLIS: You know, we are still a buyer on it. We think there is a fair amount of value left to be unlocked in this company. We have a $19 price target. That’s about 15 percent upside. So it’s not for everyone. It’s going to be a bumpy road but again the expectations are set so low this is step one in the turn around.
GHARIB: Quick questions about Apple (NASDAQ:AAPL), a lot of expectations about Apple’s announcement tomorrow. People are expecting a mini iPad. How important is this product launch for Apple (NASDAQ:AAPL)?
GILLIS: It is actually quite important because the iPad is the second most significant revenue stream to Apple (NASDAQ:AAPL) after the iPhone. And competitors have gotten some traction by selling a 7 inch tablet. Apple (NASDAQ:AAPL) wants to nip that in the bud. I think you got to see them come out with a nice light iPad air product that’s going to be announced tomorrow.
GHARIB: Real quickly, investors are buying up the stock. It’s now at $634. Would you buy Apple (NASDAQ:AAPL)?
GILLIS: Well, the issue you have to be concerned about here is I would not be buying more shares of Apple (NASDAQ:AAPL) at this level because when you do get that new iPad out, it’s going to be less profitable than previous versions. The competition has one level to compete against Apple (NASDAQ:AAPL) and that’s price and they are using it to their full advantage.
GHARIB: Colin, do you have any disclosures to make on Yahoo (NASDAQ:YHOO)! or Apple (NASDAQ:AAPL)?
GILLIS: I do not own Yahoo (NASDAQ:YHOO)! or Apple (NASDAQ:AAPL) and the firm does not provide any investment banking services to those companies. GHARIB: Very good, thank you so much Colin, Colin Gillis of BGC
No comments:
Post a Comment