Why Yandex Shares Tanked


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Yandex have tanked today by as much as 14% after the company reported worse-than-expected earnings.

So what: Revenue in the fourth quarter came in at $290.4 million, but that 37% growth came at a high price as marketing and product development costs soared and held back the bottom line. The earnings per share of $0.26 was significantly below the $0.66 per share in profit that analysts and investors were expecting.

Now what: Concerns over growth deceleration also rattled investors. Yandex sees 2013 revenue growing by 28% to 32% on a ruble basis, which is down from the 44% full-year sales growth that the Russian search engine saw in 2012. That guidance is also lower than the 33% growth that analysts were modeling for. CFO Alexander Shulgin said the ad market is maturing and Yandex won't be able to grow sales as much as it used to.

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The article Why Yandex Shares Tanked originally appeared on Fool.com.

Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool recommends Yandex. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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