Safa Rashtchy predicts strong earnings this past quarter, starting with with a good quarter from Yahoo this Weds.
Driven by continued strong fundamentals, the first quarter of 2004 will bring mostly upsides to the estimates and only a few in-line performances. In fact, we believe the Q1 earning season will be characterized as a strong quarter with two trends: On the one hand, companies like Ask Jeeves, Netflix, and LookSmart have already pre-announced a much better-than-expected quarter. On another category, companies like eBay and Yahoo will have strong upsides to guidance – much of it already known and reflected in at least some of the Street estimates, including ours. We do believe, however, there will still be upside even to our raised estimates for Yahoo or eBay. The upside to guidance is likely to be the trend even for the smaller companies such as DoubleClick and Cnet – in general, all ad-based models should report a solid upside since the growth trend in advertising noticeably accelerated in Q1. Similarly, search not only stayed strong but showed very solid pricing for a seasonally weak Q1.