Yahoo! Yodels With Delight: Fool by Numbers

On Oct. 16, Internet veteran and Stock Advisor recommendation Yahoo! (Nasdaq: YHOO  ) released third-quarter earnings for the period ending Sept. 30, 2007.

  • To go beyond Yahoo!'s numbers, sail over to our earnings take.
  • While 11.8% revenue growth and flattish earnings won't garner medals in cyberspace, take a look at the big Y's cash generation prowess and very healthy balance sheet. Those are virtually unmatched outside of China and Mountain View.
  • Last year's long-term debt was shifted over into a short-term account of essentially the same balance, so despite appearances, the company isn't exactly debt-free.
  • CEO Jerry Yang completed his first 100 days behind the wheel to a rousing cheer from the market: Today, the share price spiked as high as 8.8% over last night's closing price.

(Figures in millions, except per-share data)

Income Statement Highlights

Q3 2007

Q3 2006

Change

Sales

$1,767.5

$1,580.3

11.8%

Net Profit

$151.3

$158.5

(4.6%)

EPS

$0.11

$0.11

0%

Diluted Shares

1,395.1

1,442.4

(3.3%)

Get back to basics with the income statement.

Margin Checkup

Q3 2007

Q3 2006

Change*

Gross Margin

58.1%

56.9%

1.2

Operating Margin

8.5%

12.8%

(4.3)

Net Margin

8.6%

10.0%

(1.5)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q3 2007

Q3 2006

Change

Cash + ST Invest.

$2,212.1

$2,109.1

4.9%

Accounts Rec.

$950.0

$784.5

21.1%

Liabilities

Q3 2007

Q3 2006

Change

Accounts Payable

$131.6

$142.5

(7.7%)

Long-Term Debt

$0.0

$750.0

N/A

The balance sheet reflects the company's health.

Cash Flow Highlights

Q3 2007

Q3 2006

Change

Cash From Ops.

$456.7

$389.7

17.2%

Capital Expenditures

$147.2

$240.8

(38.9%)

Free Cash Flow

$309.6

$148.9

107.9%

Owner Earnings

$174.7

$67.7

158.2%

Free cash flow is a Fool's best friend.

Competitive Breakdown

Market Cap (in billions)

Trailing P/E (ttm*)

CAPS Rating

Yahoo!

$37.9

55.0

**

Google (NASDAQ:GOOG)

$195.3

50.8

**

Baidu.com (NASDAQ:BIDU)

$10.5

185.8

***

IAC/InterActiveCorp (NASDAQ:IACI)

$8.4

35.8

***

Microsoft (NASDAQ:MSFT)

$288.8

21.6

**

Source: Yahoo! Finance.
*Trailing 12 months.

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