As Q3 earnings season ramps up, 3 major companies — Yahoo (YHOO – Analyst Report), VMWare (VMW – Snapshot Report) and Chipotle (CMG – Analyst Report) — have all reported earnings after the bell Tuesday. Let's start with Yahoo: earnings per share of 10 cents (accounting for stock-based compensation expenses and other before-nonrecurring-items) on $1.23 billion in revenues for the quarter. Zacks consensus estimates actually look like a beat on the top and bottom lines, but YHOO shares are feeling some slight pressure in the after-market.
Traffic acquisition costs (TAC) reached $119 million in Q3, and Yahoo's Display business brought in $509 million. Mavens revenue (Mavens = mobile, video, native and social) rose 43 percent year over year to $422 million; mobile and PC revenues are up, as well. For Q4, Yahoo has lowered its guidance rather substantially for both earnings and sales.
There's not a lot of strength from unexpected areas, and Yahoo carries plenty of extra baggage along with it: what will the company do with the spin-off stake of its Alibaba (BABA – Analyst Report) holdings, will CEO Marissa Mayer exit the company soon (are both of these potential events related?), etc. Year to date, Yahoo is down 35 percent, and this may account for its lukewarm trading following the earnings report: most of the juice has already been squeezed from this orange.
Cloud-based services major VMWare posted earnings of 72 cents per share on $1.67 billion in quarterly revenues, representing a 10 percent year-over-year gain on the top line, and also beat the Zacks consensus estimate. License revenues rose 7 percent over the same time period.
Recall last week, upon the announcement that VMWare parent company EMC (EMC – Analyst Report) was in talks to be acquired by Dell, Inc. VMWare would remain a publicly-traded entity upon the move, but only with “tracking stcks” (no voting rights for EMC shareholders, etc.) at 53 percent. This sent VMW shares tumbling over 8 percent last week, and, like Yahoo, is trading modestly downward following the earnings release.
Fast-casual restaurant success story Chipotle reported its earnings miss in several quarters — its $4.59 per share missed the Zacks consensus of $4.64 — on $1.22 billion in sales, which was pretty well in line with expectations. Comp sales were up 2.6 percent, which was a modest beat though very difficult to contend with on the year-ago comps numbers. Chipotle announced it planned to open another 215-225 stores and maintain its low single-digit sales growth percentages going forward. CMG shares are also in the red during late trading.
