Yahoo! Inc. (NASDAQ: YHOO) came out with earnings and it seems that there is going to be more confusion on the report than any solid endorsement of the Carol Bartz turnaround. Earnings were $0.15 EPS and revenue was $1.136 billion on an ex-TAC basis. Thomson Reuters has estimates of $0.14 EPS and $1.16 billion in (ex-TAC) revenue.
Gross revenues were listed as $1.601 billion in revenues, and the traffic acquisition costs were $473+ million. Shares are at $15.00 and the 52-week range is $13.75 to $19.12.
Carol Bartz continued to talk this up as an earnings story and an asset management story by noting strong operating income and margin expansion. The company noted that display advertising on owned and operated sites grew 19% year over year. Operating margin expanded from 4.8% in Q2-2009 to 11.0% this quarter, but that would have been margins expanding 8.9% to 11.6% outside of restructuring.
Yahoo!’s numbers also reflect $86 million in search operating cost reimbursements from Microsoft under the ‘Search and Advertising Services and Sales Agreement.’
Guidance is not comparable because it does not breakout the traffic acquisitions: Q3-2010 Revenue guidance is $1.57 to $1.65 billion; income from operations in the range of $160 to $200 million; total expenses in the range of $1.41 to $1.45 million. Total expenses less traffic acquisition costs in the range of $945 to $965 million; Total expenses less TAC, depreciation and amortization, and stock-based compensation expense in the range of $735 to $745 million.
The cash flow from operations was up 2% at $347 million; fees revenue fell 16%; marketing services revenue from affiliates rose 7% while marketing services revenues was up 4%.
If you can’t feel much excitement about this report, there is a reason. Shares closed up 0.66% at $15.20 and shares are trading down 4.4% at $14.53 in the after-hours trading session. The 52-week trading range is $13.75 to $19.12.
JON C. OGG
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