yahooAnalysts expect Yahoo (YHOO) to report a 15% increase in earnings for the second quarter, largely due to cost cutting. Yahoo reports earnings on Tuesday.

Earnings are pegged at 15 cents a share, the average estimate of 29 analysts in a Thomson Reuters poll. Revenues are expected to be $1.13 billion, little changed from a year ago.

While Yahoo appears to be losing ground in search to Google (GOOG), the company may be boosting advertising sales, according to Stifel Nicolaus analyst Jordan Rohan. Additionally, the company cut second-quarter operating expenses to 44% of revenue from 49% a year earlier, according to Rohan.

"Growth in online ad spending in automotive, entertainment, telecom, and retail sectors appears to be accelerating," said Rohan in a note to clients Monday. "Even if Yahoo loses market share to Facebook, Yahoo's current traffic levels are sufficient to drive increased monetization and better results."

Still, Rohan maintained a "hold" rating on the stock largely because of its recent surge. Yahoo shares have jumped about 13% this month on speculation of a possible buyout. Yahoo hired Goldman Sachs Group (GS) to help deal with possible takeover attempts, Bloomberg News reported last week, adding that the company hadn't received any buyout offers. AOL (AOL), DailyFinance's parent company, has discussed a possible bid for Yahoo with private equity firms, according to various reports.

In February 2008, Microsoft (MSFT) bid almost $50 billion for Yahoo, only to withdraw the offer three months later. The company's stock has fallen almost 50% since then, leading to speculation that it is vulnerable to takeover bids.

Google attracted 66.1% of September searches, up from 65.4% the previous month, while Yahoo's share dropped to 16.7% from 17.4%, ComScore said in a report last week.


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