Yandex Jumps on Sales Forecast as Russia Ad Outlook Stabilizes

  • Search engine forecasts 2015 revenue growth of as much as 16%
  • Third-quarter sales surged 18%, beating analysts' estimates

Yandex NV, Russia’s largest search engine, rallied to a three-week high in U.S. trading as the company raised its full-year sales forecast after reporting quarterly earnings that exceeded analysts’ estimates.

The shares advanced 6.7 percent to $14.99 in New York, pushing the gain from this year’s low in August to 47 percent. Trading volume of 14.2 million shares was almost 4 times the daily average of the past three months. The Bloomberg Russia-US Equity Index declined for a second day as oil, the country’s biggest export, tumbled to a six-week low.

Yandex rose after saying revenue will probably rise 14 percent to 16 percent this year. In July, it had forecast growth in a range of 11 percent to 13 percent. The company posted third-quarter sales that beat estimates as text-based advertising revenue and paid clicks increased. The company, which gets most of its sales from online advertising, lost more than half of its market value in 2014 as a weaker ruble and the slumping economy curtailed spending on Internet ads.

“The revenue guidance the company gave earlier this year scared some investors off, but now we are seeing that the worst scenarios haven’t materialized,” Mitch Mitchell, an analyst at BCS Financial Group in Moscow, said by phone on Tuesday. “The advertising market is improving on a relative basis, although we are talking about stabilization rather than growth.”

Stock Rebound

Third-quarter sales surged 18 percent to 15.4 billion rubles ($240 million), Yandex said in a statement. That beat Interfax consensus estimates of 14.7 billion rubles. Total text-based advertising revenue increased 18 percent, while paid clicks on Yandex’s and its partners’ websites, in aggregate, increased 15 percent, the company said.

The U.S.-traded shares have advanced 24 percent since Russia’s antitrust authority ruled in September that Google Inc. has violated the country’s laws by requiring that manufacturers pre-install its services on their devices. Yandex has stabilized its share of the Russian search market at about 57 percent in the third quarter, according to the statement.

The Bloomberg gauge of Russian stocks traded in New York fell to 49.72, the lowest level in three weeks. State-controlled lender Sberbank PJSC was the worst performer, declining 5.4 percent to $5.89. Natural-gas producer Gazprom PJSC slumped 3.7 percent to $4.19. The Market Vectors Russia ETF, 43 percent of which is invested in energy stocks, slid 2.3 percent to $16.49.

Brent crude, the oil grade traders use to price the nation’s main export blend, fell 1.5 percent to $46.81 a barrel. Futures contracts on the dollar-denominated RTS Index expiring in December slipped 0.6 percent to 83,120 in U.S. hours.

United Co. Rusal slumped 3.2 percent to HK$2.99 at 11:44 a.m. in Hong Kong, heading for the lowest close since April 9, 2014, as aluminum futures in London tumbled to a six-year low.

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