Ad system trouble rattles Yelp
Yelp (YELP) recently reported that it faced a problem in 1Q17 wherein small businesses had trouble competing with large brands for advertising spots on its site through its ad placement system. But Yelp has said it was able to fix the problem.
Still, the fix seems to have come late, considering the downbeat results the company reported for 1Q17 and the anemic outlook for the current quarter and year.
Revenue up 20% annually
Yelp posted 1Q17 revenue of $197.3 million, falling below the consensus estimate of $198.3 million. Still, revenue rose 20.0% from one year ago, supported by improvements in advertising and transaction sales.
Yelp is expecting its current quarter revenue to be in the band of $202.0 million–$206.0 million, while on average, analysts are expecting revenue of $215.0 million. For fiscal 2017, the company lowered its revenue target to the range of $850.0 million–$865.0 million, while analysts are looking for revenue of $889.0 million.
This updated guidance is the second time that Yelp has trimmed its revenue forecast for the year. Initially, the company expected to hit $1.0 billion in revenues this year, but in February, the company scaled the expectation down to the range of $880.0 million–$900.0 million.
Pressure from Google and Facebook
Yelp’s anemic revenue guidance smells of a company struggling to cope with competition for advertisers. Although it added 4,500 new advertising accounts in 1Q17, as compared to 2,800 in the previous quarter, Yelp is seeing growing competition from Facebook (FB) and Alphabet’s (GOOGL), Twitter (TWTR), and Snap (SNAP).
Notably, Facebook and Google represent particularly serious threats, considering how they are gunning for Yelp’s staple market of small local business advertisers.
Symantec (SYMC) is finding it difficult to take advantage of the expanding cybersecurity market.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.