Yahoo! Inc. (NASDAQ: YHOO) shares are down 8%, or $2.59, to $29.50 tonight after the internet company reported lower-than-expected profit of 10 cents a share (versus analysts' expectations of 11 cents). Investors were evidently expecting right along with analysts, as the stock had been up 1.52% as the market waited for Yahoo! to report its first quarter earnings. When they came in, the results of Project Panama weren't having the company-wide impact so many Yahoo! watchers had clearly hoped.

Says Jordan Rohan of RBC Capital Markets, "the company is clearly still in transition." From all I've heard, Yahoo! has been in transition (I like to call it "limbo" or maybe even mild "chaos") for the past few years. When will the transition end? As Jonathan Berr suggests, maybe it won't end until Terry Semel is out -- and, I'd argue, the transition will have another year to go from there.

Or even more. Yahoo! will soon be faced with the DoubleClick problem; the internet company has a close partnership with the advertising firm, and that firm has just agreed to be sold to Google, Inc. (NASDAQ: GOOG). As MarketWatch puts it, this will mean "it'll soon be paying its chief rival for services, and at the same time, giving Google more insight into Yahoo's own business."

I'm not a Yahoo! believer -- I have to wonder if it will ever be done with its "transition."

Starbucks Corporation (NASDAQ:SBUX) investors have something to cheer about today: the company announced first quarter, fiscal 2007 results that were exactly what analysts hoped they'd be. 26 cents a share, or $205 million, up 18% from the year-earlier quarter, on revenues of $2.4 billion, up 22% from the year prior.

In about 10 minutes, the analyst earnings call will begin. I'll be live blogging the call.

2:02 p.m. (All times Pacific.) The call has begun. Disclaimers... and the call is turned over to Jim Donald, CEO. As I mentioned, comparable store sales increased 6%; he breaks it down to 4% from number of transactions, 2% from value of transaction (connected to the increase in prices perhaps?).

2:02 p.m. The company opened 728 stores (awed voice) over two stores a day. The company is focused on balanced growth, and targeted investments. "Our food program this quarter was a significant contributor to our revenues... we have remained focused on expanding our lunch program..." 69% of company-operated U.S. retail stores now have lunches. Adds approximately $300,000 in average annual revenues to one store (big!). 1200 stores now offer warm breakfast items; aggressive plans to roll out warming platform over next couple of years. The warm sandwiches add (I think I heard this right) $135,000 in average annual revenue to one store. Both warm breakfast sandwiches and lunch programs are planned to be in all company-owned U.S. stores in a few years.

2:06 p.m. Raves over the Starbucks Card -- helps promote customer loyalty, it's huge, a great gift. I must admit I just bought my sister-in-law a Starbucks Card for her birthday...

When Starbucks Corporation (NASDAQ:SBUX) presents its fiscal first quarter 2007 earnings on January 31, the company might want to roll out a new numbered cup, with the quote, "Can't Starbucks just serve its holiday beverages year-round?" Its eggnog lattes and maple macchiatos have customers slurping each winter, and investors licking their lips in anticipation of seasonally spicy earnings.

According to First Call, analysts expect the coffee retailer to earn 26 cents a share, a big bump of 36% over the year-ago quarter. But for analysts who are hoping for a whopping growth rate? They don't sound so hopeful. William Blair analyst Sharon Zackfia is worried about the holiday merchandise -- the red ceramic mugs, the CDs, the bears. "Starbucks' pre-holiday markdowns on seasonal merchandise were earlier and more aggressive this year and post-holiday inventory levels were higher leading to subsequently deeper markdowns," she wrote, and it's certainly true that the Starbucks outlet on my corner was packed with holiday goodies in the weeks after Christmas (we picked up a set of coffee-cup ornaments for half price).

With a wealth of small changes to its business -- including a bigger focus on low-margin, but not labor-intensive items like books, music and those pretty red-themed mug; a bigger push into breakfast with eggy biscuity sandwiches; and a focus on spending more for more socially reponsible coffee -- the variables are many. And investors are skeptical; in the three months since the last earnings release, the stock is down about 13%. Are you really this skeptical?

Also check out some other earnings reports that we're following, and let us know your thoughts on earnings expectations.

Microsoft Corporation (NASDAQ:MSFT) first quarter earnings were strong, with revenue of $10.8 billion and net income of $3.48 billion. Everyone is looking forward, and investors don't know quite what to think: at first blush of the earnings release, the stock was down a few cents, and now has recovered in after hours trading to $28.52, up 17 cents from the market close.

Colleen Healy and Chris Liddell have just gotten on the conference call for the usual disclaimers.

2:38 p.m. [all times Pacific]: all results have come in at or above the high end of guidance, says Chris proudly. If you've never heard his voice, it's worth it: he sounds like a proud and very financially-savvy butler. He points out that the company is averaging one acquisition a month -- I don't know if I've even noticed. I'll have to pay more attention.

2:42 p.m. Colleen is giving details on first quarter performance, briefly, "in order to allow more time for your questions." It's all about the questions... She says the company made significant development on "all the products in the pipeline" and points out how the company's 11% revenue growth was driven by well-received new product launches, especially in the previously mentioned Entertainment and Devices division a.k.a. the Xbox 360.

2:45 p.m. Strong performance in the small and medium business divisions. Non-annuity growth was relatively week due to the anticipation (apprehension) of new Vista and SQL server software.

$10.81 billion in revenue. Net income of $3.48 billion, 35 cents a share. Microsoft's quarterly earnings results (it's the company's first fiscal quarter) came in with a bang, a good 11% increase over the year-earlier quarter.

For Microsoft Corporation (NASDAQ:MSFT), this news is sweet indeed. The company has shown strong growth in its Entertainment and Devices division, largely on the back of the Xbox 360 -- 6 million consoles sold!, trumpets the earnings release -- but, as Melly Alazraki mentioned in her preview earlier today, the company's real hopes are set on the upcoming release of Vista. Will it crash our computers? Will it suck? Will it justify the costly investments in R&D?

I'm sure many of these questions will be answered in the analyst conference call, which I'll be liveblogging -- 5:30 Eastern, 2:30 in local Pacific time. The stock was up just a touch to $28.35, and was down again a bit in after-hours to $28.20.

Invesors have grown accustomed to thinking of General Electric as a portfolio of companies -- after all, what do light bulbs, consumer loans, power generators, dishwashers and Nanny McPhee have in common? How much "synergy" can there really be between its divisions?

When own a conglomerate, the test of management iss not just what it does to improve its underlying companies, but whether it can buy and sell them at the right time to make extra money for shareholders. But that trading activity isn't valued as highly by investors as growth that comes from actually improving operations.

Thus, one of the hallmarks of CEO Jeff Immelt's tenure at the company is emphasizing more organic growth. That means the underlying companies are now expected to actually improve their businesses -- not just buy additional companies -- to increase sales.

Immelt started off the conference call a week ago crowing about 9% organic growth in sales achieved in the first quarter. That doesn't sound all that high, until you consider that it is more than twice as high as the company's historic rate. It's also darn good when you take into account that the company had $37.8 billion in revenues last quarter.