Internet search firm Yahoo! (NASDAQ: YHOO) recently reported that its second-quarter net income rose to $143 million, or 10 cents per share, from $132.4 million, or 9 cents per share in the same period a year earlier. Net revenue in the period ended in June fell to $1.14 billion from $1.35 billion.
Wall Street analysts on average had been expecting Yahoo! (whose options value is increasing) to post second-quarter earnings of 8 cents per share, and the company beat that estimate by a few pennies.
But those earnings came on revenues that were just in line with revenue expectations of $1.14 billion.
On the surface, it appears like good news for Yahoo!, but Yahoo!'s results were largely due to cost-cutting, and investors focused on Yahoo!'s outlook for the future, which now calls for a drop in current-quarter sales and operating income.
I currently rate Yahoo! a C, or hold.
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