You may have fooled the knee-jerk analysts, Yahoo! (NASDAQ:YHOO), but you won't slide by the more vigilant Wednesday-morning quarter hacks.

Most of last night's initial reports gushed over the online portal's third quarter. Reuters, MarketWatch, and The New York Times all emphasized the tripling of Yahoo!'s bottom line in their headlines.

That would rock, if it were on an apples-to-apples basis. Unfortunately, it's not.

Behind the numbers
Reported earnings may have been $0.04 a share during last year's third quarter, but that included one-time costs related to fending off Microsoft's (NASDAQ:MSFT) amorous advances, pursuing an ad agreement with Google (NASDAQ:GOOG), and taking an impairment hit on its Alibaba.com investment.

This quarter's $0.13-a-share profit is as padded as last year's quarter was sandbagged. In fact, roughly half of the company's pre-tax profits this time came from a gain related to the sale of its direct investment in Alibaba.com.

I'm not a fan of non-GAAP profitability, but at least it's a fairer representation this time. On that adjusted basis, earnings rose from $0.09 a share to $0.15 a share. That's a very strong showing by Yahoo! -- and actually a bigger Wall Street win than many are reporting, since the pros were only expecting non-GAAP earnings of $0.07 a share -- but there's no tripling here.

The tweaked bottom line is impressive, especially since the top line diminished. Revenue excluding traffic acquisition costs fell by 15% to $1.13 billion, making it the one line item that analysts essentially got right.

How could pedigreed pros get so lost in modeling this income statement? Well, they probably underestimated Yahoo!'s ability to slash costs. Former CEO Jerry Yang would announce layoffs, but new hires would quickly pop up in their place. Projects would get shelved, only to be replaced by other initiatives and platform makeovers requiring significant capital outlays.

New CEO Carol Bartz has a surer hand on the wheel, even if last night's results still seemed a bit shaky. This quarter's operating expenses clocked in 18% lower than last year's quarter.

Deciphering Morse's code
Bartz "came down with something" yesterday, so she wasn't able to attend last night's conference call. CFO Timothy Morse took the reins and did an admirable job, save for two head-scratching quotes.

"Consider basic search to be an Intel chip," he began, explaining how Yahoo! can outsource its search to Microsoft's Bing and still be relevant:

An Intel chip is used in Dells, HPs, and Macs to provide the computation needed to operate them, but the differentiation between these products isn't at the chip level: It's in the different user experiences that are provided on top of them. It's the same for us in search. We will innovate on top of the results that are provided to us by Microsoft.

So let's follow this analogy, which Morse credited to Bartz, by the way. Apple (NASDAQ:AAPL) and lower-priced PCs are primarily powered by Intel (NASDAQ:INTC) chips, and Yahoo! thinks it can provide premium search on top of Bing's algorithmic process. In other words, it thinks it can be an Apple by standing on the shoulders of Microsoft.

Good luck with that.

The analogy also falls apart because Morse is comparing Microsoft in search to Intel in microprocessors. Survey says ... wrong! In terms of market share, Microsoft may not even be AMD (NYSE:AMD). (No offense intended to spunky AMD; at least it keeps Intel honest.)

Morse's second questionable quote was a sobering admission. When asked about affiliate sites -- which surprisingly held up better than Yahoo!'s own sites -- the CFO bowed before the master.

"We know that Google monetizes better than we do," he conceded. "That's well chronicled."

So what's keeping its affiliates from greener pastures? Did they get booted from Google AdSense, or is some traffic simply better served by Yahoo!'s prominence in display advertising, compared to Google's mastery of search keywords?

Giving Yahoo! a chance
Despite my stronger-than-usual cynicism, I really did walk away impressed by the company's bottom-line performance. There's a lot to like here, and Yahoo!'s guidance calls for sequential improvement in revenue and operating cash flow during the current quarter.

Yahoo!'s also still loaded with assets. Beyond its $4.5 billion in cash and short-term investments, it has at least $10.3 billion in the market value of its 35% stake in Yahoo! Japan, and a 29% indirect stake in Alibaba.com. That sum will grow as Yahoo!'s minority-owned Alibaba Group takes more of its subsidiaries public in China.

It also bears pointing out Yahoo!'s page views were up roughly 5% during the quarter. Display advertising has been hit hard in this recession, as Yahoo! and Time Warner's (NYSE:TWX) AOL can attest. It's comforting to know that users are still coming. Now it's just a matter of waiting for the sponsors to return.

Congrats to Yahoo! on a quarter that was healthy even without the smoke and mirrors. It's always nice to see a parlor trick that holds up even when the big secret's revealed.

Google is a Motley Fool Rule Breakers recommendation. Apple is a Motley Fool Stock Advisor selection. Intel and Microsoft are Motley Fool Inside Value selections. The Fool owns shares of Intel. Try any of our Foolish newsletter services, free for 30 days.

Longtime Fool contributor Rick Munarriz wonders what the rest of the world thinks of Yahoo!. He does not own shares in any of the stocks in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.