Haim, maybe someone is paying attention ??
Barron's on Yahoo from Abe's column:
What really got us mumbling on this was Yahoo's release of its quarterly
earnings last week, which, the company's bullish claque proclaimed, had beat
the estimates. After perusing the release and mulling the plasticity of the
pro-forma contrivance, we were equally puzzled by (a) how anyone could
make an earnings estimate in the first place; and (b) how any financial officer
of the most modest competence could fail to beat it.
Pro forma, Yahoo reported second-quarter earnings of 11 cents a share,
compared with a penny a share in the year-earlier period. However, when
you add in the merger costs and amortization of goodwill of this very busy
acquirer, earnings disappear, replaced by a loss of seven cents a share, down
from eight cents a share.
Actually, the red ink flowed more abundantly than those figures suggest. For
while it suffered a net loss of $15 million versus $14 million, the company in its
June quarter this year benefited from a $3 million tax credit; by contrast, its
1998 June quarter was burdened by a tax charge of roughly that amount. Put
another way, before taxes, Yahoo lost $18 million this year versus $11 million
last year.
Which neatly illustrates why Yahoo and its fans -- and so many of its Internet
kith and kin -- cherish pro forma. For in earnings, like virtually everything else
about these companies, illusion, not the real thing, is what counts.
The last word on bubbles.
Stephen |
