Yahoo! Inc. Earnings Cheat Sheet: Strong Margins Continue as Net Income Rises

Lower costs helped S&P 500 (NYSE:SPY) component Yahoo! Inc. (NASDAQ:YHOO) pull in a higher profit in the second quarter. Yahoo, Inc., is focused on powering its communities of users, advertisers, publishers and developers by creating indispensable experiences built on trust.

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Yahoo Earnings Cheat Sheet for the Second Quarter

Results: Net income for the internet information provider rose to $237 million (18 cents per share) vs. $213.3 million (15 cents per share) in the same quarter a year earlier. This marks a rise of 11.1% from the year earlier quarter.

Revenue: GAAP revenue fell 23.3% to $1.23 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: YHOO fell in line with the mean analyst estimate of 18 cents per share. It beat the average revenue estimate of $1.11 billion.

Quoting Management: “For the quarter, earnings per share was up by 18% year over year. We made clear progress in search, and saw strong growth in engagement on our media properties,” said Carol Bartz, CEO of Yahoo!. “We experienced softness in display revenue in the second half of the quarter due to comprehensive changes we have made in our sales organization to position ourselves for more rapid display growth in the future.”

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 12.4 percentage points to 69.8% from the year earlier quarter. Over that span, margins have grown on average 7.5 percentage points per quarter on a year-over-year basis.

The company fell in line with estimates last quarter after topping expectations in the previous two quarters. In the first quarter, it topped the mark by 3 cents, and in the fourth quarter of the last fiscal year, it was ahead by 4 cents.

Revenue has fallen for the past three quarters. In the first quarter, revenue declined 24% to $1.21 billion while the figure fell 11.9% in the fourth quarter of the last fiscal year from the year earlier.

The increase in profit last quarter comes after net income fell in the previous quarter. In the first quarter, net income declined 28.1% to $223 million.

Competitors to Watch: Google Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), AOL, Inc. (NYSE:AOL), IAC/InterActiveCorp (NASDAQ:IACI), Rediff.com India Ltd. (NASDAQ:REDF), Sohu.com Inc. (NASDAQ:SOHU), Baidu.com, Inc. (NASDAQ:BIDU), InfoSpace, Inc. (NASDAQ:INSP), Intl. Business Machines Corp. (NYSE:IBM), and Demand Media Inc (NYSE:DMD).

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(Source: Xignite Financials)