Yahoo! Yodels With Delight: Fool by Numbers

By Anders Bylund
October 17, 2007 | Comments (0)

Recs

5

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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Yahoo! is a Motley Fool Stock Advisor recommendation, while Baidu and CNET live in the Rule Breakers neighborhood. Microsoft is an Inside Value pick.

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, Anders Bylund was a Google shareholder, but had no other position in any company mentioned. Fool rules are here.

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