Yahoo! Inc. Earnings: Margins Expand For Fifth Straight Quarter, but Net Income Falls

S&P 500 (NYSE:SPY) component Yahoo! Inc. (NASDAQ:YHOO) reported its results for the fourth quarter. Yahoo is a digital media company that delivers personalized digital content and experiences across devices worldwide.

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Yahoo Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the internet information provider fell to $296 million (24 cents per share) vs. $312 million (24 cents per share) a year earlier. This is a decline of 5.1% from the year earlier quarter.

Revenue: Fell 13.2% to $1.32 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: YHOO reported adjusted net income of 25 cents per share. By that measure, the company beat the mean estimate of 24 cents per share. It beat the average revenue estimate of $1.19 billion.

Quoting Management: “Yahoo! continued to make progress in the quarter with operating income increasing ten percent year over year,” said Scott Thompson, Yahoo! CEO. “In 2012 we will be aligning resources behind key areas of focus to enable us to move aggressively in market and grow our business, bringing innovative new products and experiences to both our users and advertisers.”

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 6.8 percentage points to 70.2% from the year earlier quarter. Over that span, margins have grown on average 10.4 percentage points per quarter on a year-over-year basis.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 4 cents in the third quarter, by one cent in the second quarter, and by 3 cents in the first quarter.

Revenue has fallen in the past four quarters. Revenue declined 24% to $1.22 billion in the third quarter. The figure fell 23.3% in the second quarter from the year earlier and dropped 24% in the first quarter from the year-ago quarter.

The company has now seen net income fall in each of the last two quarters. In the third quarter, net income fell 26% from the year earlier quarter.

Looking Forward: Expectations for the first quarter of the next fiscal year have not changed from 20 cents. For the fiscal year, the average estimate has been unchanged at 80 cents a share.

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).

Investing Insights: Will the iPad 3 Be the Next Catalyst for Apple’s Stock?

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com