Yahoo! Japan Earnings Preview: Media & Commerce Likely To Drive Top Line Growth

YAHOY: Yahoo Japan Corp ADR logo
Yahoo Japan Corp ADR

Yahoo! Japan (OTC:YAHOY) is scheduled to announce its Q1 FY’18 results on July 27. The company has reported steady revenue growth from its core media and e-commerce verticals in recent quarters. The company continues to expand its services and footprint in the Japanese e-commerce industry, and strengthen its position in the Japanese online ad industry. This trend continued through the end of FY’17 ended March, with 4-5% growth in the core media and commerce segments. Revenue growth was complemented by a slight improvement in margins.

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Yahoo! Japan’s advertising revenues have been increasing for the past few years, largely due to the increased adoption of smartphones and the company’s hold in the Japanese smartphone market. For the June quarter, we expect higher mobile engagements and page views to continue to drive revenues. We forecast combined Media revenues to increase 7% y-o-y to ¥72 billion. Similarly, Yahoo! Japan’s e-commerce businesses are also likely to benefit from continued expansion of service offerings in the mobile domain. Consequently, we expect the company’s transaction value across the e-commerce business segment to improve in the coming quarters. Additionally, since online sales still account for a relatively small portion of total retail sales in Japan, the untapped market provides a significant opportunity for the company to grow its business in the coming years. For the June quarter, we forecast e-commerce revenues to increase 9% over the prior year period to ¥155 billion. As a result, we forecast fiscal Q1 net revenues to be up 8% to ¥233 billion with meaningful contribution from all revenue segments. We have summarized our expectations for the June quarter on our interactive earnings preview dashboard for Yahoo! Japan. You can modify the revenue and net profit expectations for each division to see the impact on the company’s expected earnings for the quarter.

See our complete analysis of Yahoo! JAPAN here

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