Yandex NV (YNDX), Russia largest search-engine company, predicted that sales will gain as much as 30 percent this year, driven by online advertising, after it reported fourth-quarter profit that missed analyst estimates.
Net income rose 24 percent from a year earlier to 3.35 billion rubles ($94 million), Yandex said in a statement today. That fell short of the 3.7 billion-ruble average of analyst estimates compiled by Bloomberg. Revenue gained 37 percent to 12.1 billion rubles.
Yandex, which has more than double Google Inc.’s (GOOG) market share for Internet searches in Russia, is benefiting from booming online advertising in the country. So-called “contextual” marketing, in which ads are targeted to a user’s searches, will help improve sales, according to the company.
The company repurchased 10 million shares as of Feb. 18 to support the share price and said today it may buy back as many as 5 million more. Yandex shares have declined almost 8 percent this year after doubling last year.
The company expects like-for-like sales growth of 25 percent to 30 percent this year as advertising is also bolstered by last year’s agreement to sell contextual ads on Mail.ru Group Ltd’s (MAIL) platform, according to Yandex. The figure excludes revenue associated with Yandex Money.
Yandex is also expanding into other growing segments of e-commerce and online video with the recent acquisitions of the Multiship software platform and Kinopoisk, a local clone of the IMDb movie database.
The search-engine operator had 62 percent of the Russian market in January compared with Google’s 27 percent, according to Moscow-based researcher LiveInternet.ru.
To contact the reporter on this story: Ilya Khrennikov in Moscow at email@example.com