Yahoo’s Earnings Tank…. But Somehow Its Stock Rises After Hours…. How Does That Work?

Yahoo’s earnings have hit the street (Warning:PDF) just after the close of trading today. Earnings are 1 cent lower than expectations, with net income declining 19 percent and revenue a bit on the low side as well. Second-quarter net income fell to $131-million, or 9 cents per diluted share, from $161-million, or 11 cents per share, a year earlier. Profit was $139-million, or 10 cents per share, down from $163-million, or 12 cents per share, a year ago. Gross revenue rose 6 per cent to $1.798-billion. Net revenue excluding payments to affiliated Web sites that carry Yahoo advertising services rose 8 per cent to $1.35-billion. Wall Street was looking for net revenue of $1.37 billion.

Strangely, their stock is up in after hours trading by 2% – 3%. I’m not sure how that works as other companies have had their stock punished when they missed estimates. But It clearly made CEO Jerry Yang happy:

“Yahoo! saw benefits in the second quarter from a number of the strategic initiatives that we have been delivering against, including the roll out of innovations in search and the announcement of a number of important partnerships. We are seeing validation that we have the right strategy as we continue to make transformational investments that position us to take advantage of pivotal trends driving growth on the Internet.”

So does this mean that Yang is out of the woods, or is this a brief respite from the turmoil that he has to deal with? Tune in August 1st for that answer.

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