Today:Yelp scores its first quarterly profits in another busy day for Silicon Valley earnings reports, and Twitter shoots higher after its World Cup score.
The Lead: Yelp posts a profit, still sees growth ahead
Yelp produced the first quarterly profit in corporate history in the spring and increased its forecasts for the full year as the online-reviews site continued to show off burgeoning popularity Wednesday.
The San Francisco company reported net income of $2.7 million, or 4 cents a share, on sales of $88.8 million, representing a gain of 61 percent from the same period a year ago. The results easily beat Wall Street analysts' expectations for the company of a loss of 3 cents per share on revenues of $86.3 million.
Co-founder and CEO Jeremy Stoppelman celebrated the company's ability to produce profits for the first time, but insisted his focus was on continued growth and investment.
"While this is an important milestone, we still have a large local opportunity ahead of us," he said in Wednesday's announcement.
Yelp managed to post such strong numbers through increased visitors, with monthly unique visitors to all of Yelp's offerings growing 27 percent year-over-year to 138 million, and mobile users growing 51 percent and nearly equaling half of all visitors at 68 million. The businesses that those visitors are looking up or reviewing also jumped at the chance to advertise on Yelp, as active local business accounts neared 80,000 after year-over-year growth of 55 percent.
The strong quarter led Yelp to increase its forecast for full-year revenues, with the company now expecting to generate sales of $372 million to $375 million in 2014 after posting a 2013 total of $233 million.
Yelp stock jumped 8.8 percent to $75.60 in regular trading Wednesday, then topped $80 in late trading immediately following the results' release, though prices soon calmed down and remained closer to the closing mark.
Eleven other SV150 companies released their earnings reports Wednesday, with the largest profits and revenues belonging to Fremont chip company Lam Research. Lam, the 26th-largest tech company in Silicon Valley, reported net income of $233.4 million, or $1.35 a share, on sales of $1.25 billion, and shares dropped about 1.5 percent in late trading after closing at $67.89. Redwood City photo-services website Shutterfly lost $27.1 million in the second quarter, or 70 cents a share, on sales of $159.1 million, and shares moved about 1 percent higher after closing at $47.49. Ruckus Wireless earned $1.44 million, or 2 cents a share, on sales of $81 million, and its shares moved about 3.5 percent higher after closing with a 3 percent gain at $12.96. Rovi lost $2.6 million, or 3 cents a share, on sales of $137.1 million and saw little movement in late trading following a close at $23.71.
Cavium announced the acquisition of fellow San Jose networking company Xpliant, which it had invested in, for about $90 million Wednesday, and showed off a quarterly net loss of $11 million, or 21 cents a share, on sales of $90.7 million. Sunnyvale flash-memory company Spansion seemed to be the day's big post-earnings loser, dropping 13 percent after announcing losses of $12 million, or 20 cents a share, on sales of $314.7 million. Coherent reported profits of $13 million, or 52 cents a share, on sales of $196.5 million, and FormFactor lost $4.3 million, or 8 cents a share, on sales of $67.4 million. Equinix earned $10.1 million, or 22 cents a share, on revenues of $605.2 million, and the Redwood City data-center company moved about 1.5 percent higher after closing at $215.75. Nanometrics lost $588,000, or 2 cents a share, on sales of $48 million, and Silicon Image earned $1.1 million, or a penny a share, on sales of $59.5 million.
SV150 market report: Twitter roars 20 percent higher
Wall Street's major indexes moved little Wednesday, after the federal government announced that economic growth in the second quarter experienced a large leap to 4 percent and the Federal Reserve gave no hints about when it would increase interest rates. Technology stocks did experience strong gains, though, as Twitter's explosive post-earnings increase helped Silicon Valley tech stocks gain 0.7 percent on the day.
Twitter shot 20 percent higher after showing off strong user growth and better than expected revenues in the same quarter that soccer fans turned to the social network to discuss the World Cup. Analysts tripped over themselves to increase price targets and cheer Twitter's results, with Topeka Capital Markets analyst Victor Anthony writing that the results "should represent a breakout quarter for Twitter." Despite the positive notes, analysts still doubted CEO Dick Costolo's contention that the user gains were not a result of the World Cup, which would bolster bears' case that the gains could be a one-time boost. Twitter moved as high as $48 Wednesday before closing at $46.30, its highest closing price since April Fools' Day, and it acquired yet another small tech startup.
Netflix jumped 2.4 percent to $434.36 after striking an interconnection deal with AT&T, similar to the Los Gatos video-on-demand company's previous deals with Comcast and Verizon. Tesla Motors moved 1.7 percent higher to $228.92 a day ahead of its expected earnings report, as Morgan Stanley predicted Tesla could double its 2013 revenues with battery sales for solar power collection. Facebook couldn't match rival Twitter's gains, but the Menlo Park company gained 1.3 percent to $74.68 after ditching its e-commerce attempt dubbed Gifts. Sunnyvale's Applied Micro began shipping server chips in a challenge to Intel, but investors punished its weak earnings report from Tuesday by sending shares down 9.9 percent to $8.71; Intel gained 0.5 percent to $34.35.
Up: Twitter, Yelp, Workday, Splunk, GoPro, LinkedIn, VMware, Salesforce, Yahoo, Netflix, Tesla, Nvidia, NetApp, Facebook, Pandora
Down: Adobe, Cisco, Apple, Zynga
The SV150 index of Silicon Valley's largest tech companies: Up 11.5, or 0.74 percent, to 1,575
The tech-heavy Nasdaq composite index: Down 31.75, or 0.19 percent, to 16,880.36
The blue chip Dow Jones industrial average: Up 20.2, or 0.45 percent, to 4,462.9
And the widely watched Standard & Poor's 500 index: Up 0.12, or 0.01 percent, to 1,970.07