NEW YORK (CNNfn) - Shares of the Web portal Yahoo! Inc. lost 15 percent of their value Thursday after the company warned that softening ad sales would lead to lower-than-expected earnings this year.
But the losses had no noticeable effect on the rest of the market. The Nasdaq composite index recorded its first three-day winning streak since August.
While Yahoo! met Wall Street's profit targets for the fourth quarter, it said first-quarter earnings could drop as much as 60 percent below year-ago figures.
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The forecast, if it holds, would mark the first time the Web portal reported a negative quarter-to-quarter earnings comparison. For the full year, Yahoo! expects its earnings per share to fall 42 percent below analysts' estimates.
For the full year 2001, Yahoo! sees revenue of $1.2 billion to $1.3 billion, with marketing services and commerce accounting for 80 percent-to-85 percent of revenue and business services growing 15 percent-to-20 percent. That's as much as 15.5 percent lower than the current mean analyst revenue estimate of $1.42 billion.
The company posted a fourth-quarter profit of 13 cents per share.
"Despite the awful near-term financial outlook, the key value-drivers showed impressive growth," said Merrill Lynch analyst Henry Blodget.
Blodget cut his revenue and earnings estimates for Yahoo!, but said he believes the company's forecast is conservative. He cut his 2001 revenue estimate to $1.27 billion from $1.45 billion, and his earnings per share estimate to 47 cents from 59 cents. That's higher than the company's forecast range of 33-to-43 cents.
 But Mark Rowen of Prudential Securities lowered his rating on Yahoo! to "hold" from "strong buy" and slashed his price target to $20 from $90.
"With 2001 revenue growth rates now expected to be in a range of 9-to-18 percent and earnings per share growth expected to be negative 12-to-33 percent, we believe Yahoo!'s price-earnings multiple will contract until the company is able to demonstrate significantly higher growth rates," Rowen said.
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Among other companies exposed to the Web advertising market, DoubleClick (DCLK: Research, Estimates) declined $1.19 to $11.25 and CNET (CNET: Research, Estimates) lost $1.56 to $13.56.
Motorola, Rational Software gain
Separately, Motorola gained 94 cents to $22.13 after the semiconductor and communications equipment company posted fourth-quarter sales and earnings after the close Wednesday that met Wall Street's expectations.
Motorola (MOT: Research, Estimates) said it logged an operating profit of $335 million, or 15 cents per share. That's below operating earnings of 26 cents per share in the same year-earlier period, and is in line with the 15 cents per share analysts surveyed by earnings tracker First Call had expected.
Motorola's total revenue for the quarter rose $10.1 billion, also in line with the analysts surveyed by First Call. That was 11 percent above the $9.1 billion in revenue the company reported during the fourth quarter of 1999. While Motorola met the Street's most recent quarterly financial estimates, those estimates have been drastically reduced over the past three months.
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In other earnings-related news, Rational Software (RATL: Research, Estimates), a maker of software development tools, gained after it posted third-quarter pro forma results that beat Wall Street expectations and increased earnings guidance for the fourth quarter of 2001 and fiscal 2002.
After the close Wednesday, Rational said that for the third quarter ended Dec. 31 its pro forma net income rose to $40.2 million, or 20 cents per diluted share, from $25.6 million, or 13 cents per share, in the year-ago period. The company's pro forma results exclude unusual items related to acquisitions.
Wall Street analysts who follow the company, on average, had expected it to earn 18 cents per share in the third quarter, according to First Call/Thomson Financial. Rational's shares jumped $6.06 to $45.19.
Separately, Credit Suisse First Boston analyst Lissa Bogaty reduced her revenue and earnings per share estimates for networking equipment maker Cisco Systems (CSCO: Research, Estimates) in response to remarks Cisco's CEO made at an investor conference Wednesday. At the conference, Cisco CEO John Chambers said he is cautious about the company's near-term revenue growth because of the recent slowdown in the economy.
Bogaty reduced her revenue estimate for the January quarter to $7.041 billion from $7.171 billion, but maintained her earnings per share estimate of 19 cents. For fiscal 2001, she lowered her revenue estimate to $28.4 billion from $29.6 billion and her earnings estimate to 75 cents from 78 cents.
Cisco rose Thursday, in a rally that led some analyst to predict that the Nasdaq composite index has finally bottomed.
But not so fast, says one brokerage. Merrill Lynch analysts Joe Osha in an note Thursday said earnings expectations for semiconductor makers are still too high.
He expects pricing pressures and slow growth in the flash memory business to hurt profitability. Osha lowered his earnings outlook on Intel, Advanced Micro Devices, Analog Devices, Texas Instruments and Linear Technology.
-- Reuters contributed to this article. 
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