Yahoo! Inc. (NASDAQ: YHOO) Q1 Earnings Call: Top 2 Things To Watch [VIDEO]

Internet giant Yahoo! Inc. (NASDAQ:YHOO) reported Tuesday fiscal first-quarter earnings of 38 cents a share, excluding items, on revenue of $1.09 billion, compared with earnings of 38 cents per share on revenue of $1.07 billion during the same period a year ago.

Wall Street expected the technology company to report earnings of 37 cents per share for the quarter ended March 31, 2014 on revenue of $1.08 billion, according to analysts polled by Reuters.

Yahoo’s Chief Executive Officer Marissa Mayer is scheduled to host a conference call with shareholders at 5 p.m. Eastern on Tuesday to discuss its first-quarter earnings results. In addition, the company will discuss its report via live stream video on Yahoo Finance.

Analysts will be watching for two key points from Yahoo’s conference call: clues as to how Alibaba will be valued ahead of its initial public offering and how the company forecasts capitalizing on mobile advertising revenue growth.

Alibaba IPO

Investors will be keeping a close eye on what Yahoo says about Alibaba Group Holding Limited (ABABA), as it is widely expected to announce its initial public offering soon, possibly valuing the Chinese e-commerce giant at more than $100 billion.

“I’m not sure we’ll hear about timing,” Keith Bliss, senior vice president and director of sales & marketing at Cuttone & Company Inc., told International Business Times. “Most people think that that’s going to come somewhere in the third-quarter, but since they [Yahoo] still own 24 percent of Alibaba, they have to break that out as a separate line item."

Yahoo announced in October 2013 it had amended its agreement with Alibaba and reduced its planned sale of the stock that it is required to sell in connection with a qualified initial public offering by 20.4 percent from 261.5 million shares to 208 million shares. The company’s fiscal 2013 fourth-quarter results published in January showed Alibaba's revenue rose 51 percent year over year to $1.776 billion, down from 61 percent in the second-quarter.

“It’ll be interesting to see what Alibaba’s earnings were,” added Bliss. “They disappointed last quarter because people were starting to think that their revenue trend was slowing, but by all accounts and some of the rumors that I’ve heard is that Alibaba had a pretty good first quarter coming in. So this is where we’ll see the greatest look that we can get pre IPO of what Alibaba’s valuation is going to be.”

Mobile Ad Growth

Yahoo posted fiscal fourth-quarter earnings in January that topped Wall Street estimates with earnings per share of 46 cents, excluding one-time items, on revenue of $1.20 billion, excluding traffic acquisition costs, in-line with analysts’ forecasts. But the company disappointed investors during the prior earnings call after its revenue guidance for the first-quarter fell short of analyst expectations.

“Outside of Alibaba, though, because part of that deal is they’re forced to shed that investment once Alibaba goes public, now we need to hear from Marissa Mayer on what they’re doing in the ad revenue space,” Bliss said. “They have quite a portfolio of applications for the mobile devices. They have about 400 million people now. Tagging into some of their applications and other projects that they have on mobile.”

In Yahoo’s first-quarter 2014 earnings statement released on Tuesday, the company announced its best first-quarter revenue, ex-TAC, since 2010 at 1.087 million, up 1 percent compared to the first-quarter of 2013. The company added that it sees more than 430 million monthly mobile users accessing Yahoo's new products.

“Are they going to be able to capitalize on the mobile as revenue trend, like Facebook and Google are? So far in the last few quarters we’ve not heard that,” said Bliss. “They’ve been stagnant. So let’s see what Marissa Mayer has in her bag of tricks to get that business going.”

Mayer has moved aggressively towards mobile ad growth since taking over as chief executive in July 2012. In the advertising space, Yahoo said business highlights during the first-quarter included introducing the new Yahoo Advertising -- a suite of web, mobile, and video ad products across native, audience, and premium display. In addition, the internet company also launched Yahoo Gemini, the first unified marketplace for mobile search and native advertising, and Tumblr Sponsored Posts Powered by Yahoo Advertising.

During the fourth-quarter of the company’s fiscal 2013 year, Yahoo acquired Aviate (ThumbsUp Labs), PeerCDN (Instant IO), Evntlive, Ptch, SkyPhrase, LookFlow, Bread Labs and Hitpost to strengthen its products, content offerings and core technology.

Shares of Yahoo rallied more than 8 percent in after-hours trading ahead of the company’s conference call with shareholders.