Yahoo's trumpeting its 11 percent profit increase this afternoon as a rebuttal to Microsoft, and the story emerged as "Yahoo beats estimates," but where would it be without a few one-time events that happened during the quarter?

It's a tricky earnings report.

It looks to me like special events carried the day. Without a $350 million one-time payment from AT&T, free cash flow would have declined instead of gaining 75 percent. Without a $401 million gain from its stake in Alibaba's IPO, net income would have been flat.

Even with those one-time pops, Yahoo's business segment income wasn't very exciting. From the release:

United States segment operating income before depreciation, amortization, and stock-based compensation expense for the first quarter of 2008 was $315 million, an 8 percent decrease compared to $342 million for the same period of 2007.

International segment operating income before depreciation, amortization, and stock-based compensation
expense for the first quarter of 2008 was $118 million, a 1 percent decrease compared to $119 million for
the same period of 2007.

Does the report say Yahoo's still got it, or that Ballmer's right and he may have bid too much?

Seems like Yahoo pulled out all the stops and had a few lucky breaks during this quarter, so today's earnings report may not be the window into the company's true situation that investors deserve.