By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Yahoo Inc. was in the doldrums
Wednesday as the online media company's shares slumped more than 8%
and led a slate of decliners on a mostly down day for the tech
sector.
Yahoo (YHOO) gave up $3.03 a share to fall to $35.22 following
the company's fourth-quarter results, which came out late Tuesday.
Yahoo reported earnings excluding one-time items of 46 cents a
share, which topped the 39-cents-a-share forecast of analysts
surveyed by FactSet, but its sales of $1.2 billion were just in
line with Wall Street's estimates, and down slightly from a year
ago.
And the main issue investors keyed on was a 6% drop in Yahoo's
display-ad revenue, which was bigger than consensus estimates.
Mark Mahaney of RBC Capital Markets said that though he remains
a believer in "a potential turnaround story" in Yahoo's core
business, "history suggests that this will be a multi-year process
built on improved products and improved execution. To date, we
haven't seen any positive fundamentals impact from the accelerated
pace of product innovation, but we believe [and] hope this could
happen sometime in 2014."
With Yahoo in the lead, several other Internet companies' shares
were also in the red, including Facebook Inc. (FB), which fell more
than 2% to $53.68 ahead of the social-networking company's
quarterly results, due after the close of trading Wednesday.
Facebook is expected to deal with questions about topics such as
youth users and video ads after reporting its results.
Among other Internet companies, Yelp Inc. (YELP) shares fell
almost 4%, Pandora Media Inc. (P) was down nearly 2% and AOL Inc.
(AOL) shares gave up 3.6%.
VMware Inc. (VMW) shares shed 20 cents, to trade at $94.65 in
the wake of mixed quarterly results late Tuesday, and EMC Corp.
(EMC) was off by 1.5% at $24.99 a share. Before the market opened,
EMC reported a gain in its fourth-quarter earnings, but gave a
weaker-than-expected first-quarter forecast and said it could cut
up to 1,000 jobs this year.
Videogame publisher Electronic Arts Inc. (EA) rose by 1.5% to
$25.26 despite reporting weak fourth-quarter sales and giving a
disappointing outlook late Tuesday. However, many analysts remained
upbeat on EA's prospects due to new game consoles from Sony Corp.
(SNE) and Microsoft Corp. (MSFT).
The tech-heavy Nasdaq Composite Index (RIXF) fell by 23 points
to 4,074, but the Philadelphia Semiconductor Index (SOX) managed to
eke out a small gain.
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