Yahoo (YHOO) reports today, what to expect

Get ready day traders, Yahoo! Inc. (NASDAQ:YHOO) reports today (10/16) and the word on the Street is that they will be on target.  Firing the CEO and having the Co-Founder step back in may actually work out this quarter, so can YHOO shares break past $30?

Yahoo Inc. reports its fiscal Q3 earnings after the close today(10/16). They had management shakeup issues that took place shortly before the end of the prior period. Former CEO Terry Semel was booted and company co-founder Jerry Yang stepped in.  They merged their search and display advertising departments in the U.S.

Yahoo finished its purchase of online advertising exchange Right Media Inc. during the third quarter, and announced plans to acquire several businesses, including advertising network Blue Lithium and e-mail service Zimbra Inc.

Also during the period, Yahoo said it will sell most of the display advertising for Bebo, which is England's top online social network.

In July, Yahoo predicted third-quarter revenue, excluding traffic acquisition costs, of between $1.17 billion and $1.31 billion. Analysts polled by Thomson Financial, on average, expect earnings of 8 cents per share on revenue, excluding traffic acquisition costs, of $1.24 billion.

In a note to clients Friday, Cantor Fitzgerald analyst Derek Brown predicted Yahoo will report earnings and revenue in line with Wall Street estimates.

Brown anticipates Yahoo's third-quarter results will reinforce his view that the company is losing "considerable share" in the online ad market and that its Panama advertising system is doing fairly well but "has not proven a 'game-changer.'"

He also thinks the results will reflect that "recent acquisitions, while promising, are not likely to significantly alter the near-term trajectory of Yahoo's business."

Brown has a "Hold" rating and $30 price target for the company's shares.

In a Monday note, Deutsche Bank analyst Jeetil Patel predicted third-quarter results will be in-line or slightly below expectations, Patel has a "Hold" rating and $24 price target for Yahoo shares.

Brown expects a "relatively muted" outlook, excluding acquisitions from Yahoo. He expects the company to post 2007 earnings of 42 cents per share on revenue of $5.02 billion. Patel is concerned about the company's growth potential, given recent search volume and U.S. traffic issues.

So if you don't have a position before the earnings call, the Masters are thinking YHOO will win on the call.  However a huge move in the shares is not likely and the amount of money on the line for the October 07' Calls and Puts is out-of-control, just take a look (click here).  If you're thinking about buying shares, just wait until after the call, you should have time to move in on this stock in the days following the call.

Article written by Steve Reeves

Contributor to TheStockMasters.com