Ahead of the Bell: Yahoo shares up after 3Q earns
NEW YORK (AP) — Yahoo's stock got a 4 percent boost in premarket trading Tuesday after the troubled Internet company turned in an encouraging earnings report for CEO Marissa Mayer's first quarter on the job.
The third-quarter results announced Monday weren't astounding, but they were better than analysts anticipated. Most importantly, Yahoo's net revenue crept up from the previous year for the third consecutive year.
That reinforced the belief that things are finally getting better at Yahoo after five years of financial malaise, especially with the hard-driving, well-respected Mayer at the helm. The company had lured Mayer away from rival Google Inc. in mid-July.
Shares were up 67 cents, or 4.3 percent, to $16.44 before the regular trading session began.
On Tuesday, analysts Herman Leung and Deepak Mathivanan at Susquehanna Financial Group upgraded Yahoo's shares to "Positive" from "Neutral." They also raised their price target to $20 from $17.
The analysts praised Yahoo's reach, audience size and underlying brand value and said the new management appears to be investing in key areas such as products and "a high quality caliber of executives."
Monday's review of Yahoo's results provided Mayer with her first opportunity to publicly share her vision for the Sunnyvale, Calif., company.
Without providing specifics, Mayer said that she plans to ensure that Yahoo's services become a "daily habit" for its 700 million users. Toward that end, she wants to improve Yahoo's search engine and email service and indicated that the home page of the company's website will get a makeover. She also pledged to pour more resources into developing services for smartphones and tablet computers.
Bolstering Yahoo's product line-up through acquisitions is also on her agenda, she said, although she emphasized that most of the deals she has in mind would target relatively small startups willing to sell for less than $100 million.