Yahoo Q1 Earnings Released, Revenues and Earnings Above Expectations

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Update: Erick is live blogging the earnings call.

yahoo-logo.png Yahoo released Q1 financials moments ago, and blew through expectations. Total revenue for the quarter was $1.8 billion, net revenues were $1.35 billion. Net Income was $542 million, or $0.37 per share. That includes a one time non-cash gain related to Alibaba’s IPO. Net of that, EPS are $0.11.

Analysts were expecting Q1 net revenues of around $1.33 billion, ebitda of $435 million and EPS of $0.09/share. Citigroup had revised estimates of $1.34 billion, just under the reported results.

Other interesting tidbits:

  • Revenues were up 19% for the quarter compared to Q12007 in the U.S., and 11% internationally.
  • Net revenues of $1,352 million were a 14 percent increase compared to $1,183 million for the same period of 2007.
  • Operating income for the first quarter of 2008 was $121 million, a 28 percent decrease compared to $169 million for the same period of 2007.
  • Yahoo has spent $14 million to date on outside advisors on the Microsoft deal
  • They took a $29 million charge for severance arrangements.

What does this mean for Yahoo? Probably not much relative to other things going on, although it is certainly good news for them. A very high percentage of Yahoo’s stock is in the hands of arbitrageurs, however, who are focused only on whether or not the deal with Microsoft will happen or not, as opposed to the fundamental financial health of the company. They’ll be listening closely to the earnings call at 2 pm PST for messages about the Yahoo search deal with Google. All indications suggest that Yahoo is getting a roughly 100% revenue increase from search queries outsourced to Google.

In the meantime, Microsoft is saying the results are irrelevant to their offer. But if Yahoo signals that they think a long term Google deal is a real possibility, they may fold, and quickly.

We’ll be live blogging the earnings announcement at 2 pm.

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Read this doc on Scribd: Q1 FY08 Press Release Final
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