Yahoo! Lurches Across the Line: Fool by Numbers

On Jan. 17, Yahoo! (Nasdaq: YHOO  ) released fiscal 2005 earnings for the period ended Dec. 31, 2005.

• Large one-time gain in Q4 boosted net earnings.
• Adjusted net income of $0.58 per share versus adjusted net income of $0.36 for the prior year.
• Complex restructuring transaction lowered effective tax rate to 3% for Q4, lowering the full-year rate to 30%.

(Figures in thousands, except per-share data)

Income Statement Highlights

	FY 2005	FY 2004	% Change
Sales*	$5,257,668	$3,574,517	+47.1%
Net Profit	$1,896,230	$839,553	+125.9%
EPS	$1.28	$0.58	+120.1%

Yahoo!'s GAAP revenues differ from the net revenues reported by other news services.

Get back to basics with a look at the income statement.

Margin Checkup

	FY 2005	FY 2004	Change
Gross Margin	61.35%	63.67%	-2.33%
Op. Margin	21.07%	19.26%	+1.81%
Net Margin	36.07%	23.49%	+12.58%

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q4 2005	Q4 2004	% Change
Cash + ST Invest.	$2,560,834	$3,511,975	-27.1%
Inventory	--	--	N/A
Accounts Rec.	$721,723	$479,993	+50.4%

Liabilities	Q4 2005	Q4 2004	% Change
Long-Term Debt	$749,995	$750,000	0%
Accounts Pay.	$70,291	$48,205	+45.8%

Cash Flow Highlights

Full Year	FY 2005	FY 2004	% Change
Cash From Ops.	$1,700,713	$1,089,821	+56.1%
Capital Expend.	$408,934	$245,501	+66.6%
Free Cash Flow	$1,291,779	$844,320	+53.0%

Find out why Fools always follow the money.

Related companies:

• Google (Nasdaq: GOOG  )
• InterActiveCorp (Nasdaq: IACI  )
• Microsoft (Nasdaq: MSFT  )
• Time Warner (NYSE: TWX  )
• CNET (Nasdaq: CNET  )
• Sina (Nasdaq: SINA  )

Related Foolishness:

• While Google Grows, Yahoo! Slows
• Yahoo! Yeeowch: Fool by Numbers
• Foolish Fundamentals: Margins
• Foolish Fundamentals: Free Cash Flow
• Foolish Fundamentals: Valuation
• Foolish Fundamentals: GAAP

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Seth Jayson had shares of Microsoft, but no positions in any other firm mentioned. CNET is a Motley Fool Rule Breakers recommendation. Microsoft is an Inside Value recommendation. Time Warner is a Stock Advisor recommendation. Fool rules are here.