What earnings reports reveal about online ads

Companies that sell online advertising have begun releasing earnings reports for the latest quarter. Here are highlights of recent quarterly earnings reports from selected Internet and media companies and what they say about the state of spending on advertising.

— April 16: Yahoo Inc. says first-quarter revenue shrank by 7 percent. The weak spot was in one of Yahoo’s former strengths — display advertising. After subtracting the commissions that Yahoo pays its partners, the company’s display advertising revenue fell by 11 percent from last year to $ 402 million. That development suggests that Yahoo is losing more ground in a key area of Internet advertising to Google Inc., which already dominates search advertising, and Facebook Inc., whose online social network is becoming a more powerful marketing magnet.

The Interactive Advertising Bureau and PricewaterhouseCoopers release a report showing that U.S. Internet advertising revenue grew 15 percent to a record $ 36.6 billion in 2012, with mobile ad revenue growing faster than other types. Mobile ad revenue more than doubled from the previous year to $ 3.4 billion. It accounted for 9 percent of the total in 2012, up from 5 percent in 2011. Mobile ads represent an area of growth for many companies.

— April 18: Google Inc. issues results that provide further proof that the Internet search leader is figuring out how to make more money as Web surfers migrate from personal computers to mobile devices. The first-quarter numbers show that a recent decline in Google’s average ad prices is easing. The latest decrease in average ad prices was just 4 percent. By comparison, Google’s average ad price fell by 6 percent during the final three months of last year and by 12 percent during last year’s first quarter.

Microsoft Corp. says online advertising revenue grew 22 percent to $ 784 million in the January-March period, largely because of an increase in revenue per search, offset partly by a decrease in display advertising revenue.

Coming up:

— May 1: Facebook Inc.

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Halliburton reports Q1 Completion and Production revenue $4.1B

Reports Q1 Drilling and Evaluation revenue $ 2.9B. On the quarter, the company commented “With respect to the ongoing Multi-District Litigation trial regarding the Macondo well incident, we have recently participated in court-facilitated settlement discussions with the goal of resolving a substantial portion of private claims. We are pursuing these settlement discussions because we believe that an early and reasonably-valued resolution is in the best interests of our shareholders. Our most recent offer includes both stock and cash, with the cash components payable over an extended period of time. Discussions are at an advanced stage but have not yet resulted in a settlement. As a result, during the first quarter we recorded an after-tax charge of $ 637M which, when added to the $ 191M after-tax charge recorded in the first quarter of 2012, is based on where we are in the negotiations at the present time. Our reserve estimate also does not include any potential insurance recovery.”

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Compuware Reports 4Q Prelim Results

Compuware (CPWR) announced preliminary fourth quarter results on Apr 3, 2013. For the quarter ended Mar 31, Compuware expects to report non-GAAP earnings per share (“EPS”) in the range of 5 cents to 6 cents. Currently, the Zacks Consensus Estimate is pegged at 16 cents.

Compuware expects total revenue to be in the range of $ 237.0 million to $ 241.0 million for the quarter. The Zacks Consensus Estimate of revenues currently stands at $ 281.0 million. Compuware noted that approximately 75% to 80% of committed deals for the fourth quarter were pushed to fiscal 2014, primarily due to uncertain IT budgets and slow recovery in the European IT spending environment.

Application Performance Management revenues are expected to be in the range of $ 76.0 million to $ 78.0 million, while Mainframe revenues are projected in the range of $ 79.0 million to $ 81.0 million.

Compuware forecasts license fees to be in the range of $ 46.0 million to $ 48.0 million. Maintenance revenues are expected to be between $ 99.0 million and $ 101.0 million. Services revenues are expected to be in the range of $ 45.0 million to $ 46.0 million. Covisint revenues are expected to be in the range of $ 25.0 million to $ 26.0 million. Subscription revenues are expected to be approximately $ 21 million for the fourth quarter.

Earlier, in Jan 2013, Compuware reported impressive third quarter 2013 earnings of 12 cents per share that surpassed the Zacks Consensus Estimate by 9% (11 cents). Quarterly results were primarily aided by modest revenue growth and margin expansion.

Compuware also rejected a $ 3.2 billion bid from activist investor Elliott Management Corp. Compuware cited the $ 11.00 per share offer as inadequate and announced a number of initiatives that included a dividend payment for the first time in its history.

Compuware will pay a dividend of 50 cents per share beginning first quarter of fiscal 2014. The company announced a 3-year restructuring plan that will save $ 60.0 million annually. For fiscal 2014, the plan is expected to save a minimum of $ 20 million. Additionally, Compuware announced plans to distribute its remaining shares in Covisint Corp directly to shareholders after completing the IPO of the 20% Class A stock.

Over the last couple of months, several new private equity funds, such as Apax Partners LLP and Hellman & Friedman LLC, have emerged as prospective buyers for Compuware. Although a better buyout offer will be positive for investors, we believe that the prevailing sluggish macroeconomic conditions will likely act as an impediment toward fetching a higher price.

We believe that Compuware’s recently announced initiatives are positive for shareholders over the long term. Moreover, new program wins, innovative product pipeline and partnership with International Business Machines (IBM) will help Compuware to counter strong competition from the likes of BMC Software Inc. (BMC) and CA Technologies (CA) going forward.

Currently, Compuware has a Zacks Rank #3 (Hold).

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News Summary: Monsanto reports strong 2Q earnings

WASHINGTON (AP) — TOP SEED: Monsanto reported better-than-expected earnings for the second quarter Wednesday on strong sales of biotech corn seeds, particularly in Brazil.

GUIDANCE BOOST: The company raised its full year earnings guidance to between $ 4.40 and $ 4.50 per share, up from $ 4.30 to $ 4.40 per share. The company is expecting a record year sales of corn seed, which increased 17 percent in the quarter.

ROUNDUP REBOUND: Sales of the company’s herbicides, including the weed killer Roundup, increased 37 percent to $ 1.13 billion.

Earnings News and Information on Yahoo! Finance

Industrial Services of America reports Q4 EPS (65c), one estimate (7c)

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