US stocks fall on Yahoo warning
Yahoo's third-quarter results will be hurt by what appears to be a slowdown in the growth of auto and financial advertising, the Internet company's chief financial officer said Tuesday. Its stock fell 12 percent.
As a result, Yahoo is likely to report results in the lower half of the range it had forecast in July for revenue. Other key financial measures, such as cash flow, also are expected to be impacted.
Sue Decker, speaking at an investor conference sponsored by Goldman Sachs, said it was too early to tell whether the slowdown would spread to other areas or how long it would last.
"Whether this is temporary, or whether this spills over into other categories, we just don't know," Decker said. "We're going to watch and wait."
Following the disclosure, Yahoo's shares lost $3.47, to $25.53, in midday trading on the Nasdaq Stock Market.
Decker did not specify how much the growth was slowing down in those areas but stressed that the growth rates were still "very positive."
She cited "budget adjustments" among advertisers in those categories. Ford Motor Co. recently replaced its chief executive and accelerated a restructuring plan which calls for job cuts, plant closings and new products.
Yahoo in July estimated revenue of $1.11 billion and $1.22 billion for the third quarter.
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