Yahoo, Netflix and IBM Post Mixed Results

Yahoo, Netflix and IBM reported results yesterday and all three technology companies had mixed results causing share prices to fall

Morningstar Equity Analysts 19 July, 2016 | 3:44PM

Yahoo

Narrow-moat Yahoo (YHOO) reported second-quarter results at the low end of its guidance, but investor focus remains on the sale of the core Internet business, and the firm did not provide any updates on the state of the bidding process.

Ultimately, we believe the company’s strategy is to sell its core business and become a shell company or a tracking stock representing the interest it has in Alibaba and Yahoo Japan. We have slightly increased the probability of a successful tax-efficient approach of realizing the value of those two holdings. The shares remain fairly valued, in our opinion.

Yahoo reported net revenue of $1 billion, at the low end of management’s guidance, down 19% year over year. While part of the decline was due to Yahoo no longer receiving IP fees from Alibaba, net revenue showed weakness in search and in display, which declined 24% and 3%, respectively, versus the year-ago period.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
International Business Machines Corp109.93 USD2.59
Netflix Inc504.21 USD3.70

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Morningstar Equity Analysts  Morningstar stock and fund analysts cover 2,000 mutual funds, 2,100 equities, and 300 exchange-traded funds.

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