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Yahoo!'s Investment Income Boosts Results

Yahoo! beat the Street and then some, at first glance.

The Internet media firm posted $0.08 earnings per share for first quarter when analysts forecast $0.04. However, for those that look close enough, of the $4.285 million net income some $1.446 million was from investments, not operations.

Yahoo! has more than $100 million cash on hand. Each quarter it can generate just over $1 million in income from that alone. Without the investment income, its first quarter ending March 31 EPS would have been more in line with analysts' forecast at $0.05 EPS, just a penny better.

So another way to look at YHOO may be to automatically account for $0.03 EPS just on its investment income each quarter, as long as it has the cash. And then see where it is without that.

Meanwhile, revenue was up 20% vs. fourth quarter at $30.2 million revenue. That was 200% better than 1Q98. While advertising remained the main revenue stream, commerce revenue gained and accounted for 22% of revenue. Page views now reach 95 million per day, up from 65 million last quarter, according to Yahoo! president Tim Koogle.

Here's a snapshot of the full results:

The Numbers On Yahoo! First Quarter '98

Yahoo 1Q98 1Q97 Percent
(NASDAQ:YHOO) (millions) (millions) change
Net revenues $ 30.21 $ 10.07 200%
Income (loss) from operations $ 3.67 $ (2.33)  
Investment income, net $ 1.45 $ 1.39 4%
consolidated subsidiaries $ 0.24 $ 0.20 20%
Income (loss) before income taxes $ 5.36 $ (0.74)  
Provision for income taxes $ 1.07 -  
Net income (loss) $ 4.29 $ (0.74)  
Diluted net income (loss) per share: $ 0.08 $ (0.02)  
Wtd. Fully diluted shares 53.37 42.23 26%
Net income without investment income $ 2.84    
EPS without investment income $ 0.05    
Operating income earnings per share $ 0.07    
© 1998 Mecklermedia. Internet.com      

For a look at Yahoo!'s value per user vs. the other top 10 Web sites see today's Internet Stock Report