As Yahoo (NSDQ: YHOO) gathers itself to report its last quarterly earnings under Jerry Yang’s troubled tenure as CEO, expectations are fairly low. Estimates say on Tuesday afternoon, Yahoo will post profits of $0.13 per share for Q4 on $1.4 billion in net revenue, according to analysts surveyed at FactSet Research (via MarketWatch). Last year, Yahoo recorded $206 million, or $0.15 per share, in net income — down from the previous year’s $269 million ($0.19 per share). Keep in mind that in Q407, Yahoo still beat analysts estimates of $0.11 per share.
Below is a sample of early projections from analyst notes:
– Revenue picture mixed, net income down: BernsteinResearch’s Jeff Lindsay says Yahoo’s revenues should be up a slim 1.5 percent to $1.42 billion. That’s better than other unspecified analysts’ estimates, who expect a 2.1 percent to $1.37 billion. Meanwhile, Yahoo GAAP EPS will come in at $0.10, compared to the same consensus of $0.12. Jefferies & Co’s Youseff Squali agrees with Lindsay on revenue, but expects GAAP EPS of $0.13. MarketWatch cites a note from Cantor Fitzgerald analyst Derek Brown, who lowered his Q4 forecast for Yahoo due to the economy’s rapid deterioration.
More after the jump…
– Display sinks, while search gains: Lindsay says that Yahoo’s gross display ad revenue on its own properties will fall 5.3 percent year-over-year after experiencing a a 3.3 percent gain in Q3. Jefferies’ Squali is more pessimistic. He believes that Yahoo’s Q4 display numbers will be down 10 percent from last year. Considering that Yahoo’s display is considered much stronger than its search offerings, the economy appears to be propping up one of Yahoo’s traditionally weaker areas. Lindsay projects Yahoo’s search ad revenue will be up a robust 16 percent in Q4 following an equally high 17 percent in Q3. Perhaps new CEO Carol Bartz’s “gut instinct” isn’t so crazy to want to hold on to search for a while, as opposed to selling it off to *Microsoft*, as many investors have hoped. Again, Squali takes a dimmer view. Although Yahoo’s share of U.S. search has be stable at around 20 percent, the company’s search affiliate business will drop 24 percent as the overall search revenue will be up only 7 percent year-over-year.
– Update: JP Morgan’s Imran Khan came out with his outlook for Yahoo late Sunday night and expects poor guidance for Q1. In a research note, Khan said amid a great deal of uncertainty and conservative spending plans by marketers, ad volume is showing greater pressure. In particular, pricing in the non-performance based display business, which accounts for roughly 25 percent of gross revenue, is looking very dim. Khan adds: “We see risks with our F