I want to expand on my colleague Martin Denholm’s excellent piece yesterday about the spin on Caterpillar’s (NYSE: ) earnings.

As Martin mentioned, don’t take a company’s quarterly results at face value. Earnings and guidance are very conservative this year, so it shouldn’t come as a shock when a company beats its projections. Just because a company like Caterpillar crushes its estimates, it doesn’t mean the business is humming along. It just means they beat the estimate.

That said, at a time like this, it’s important to figure out why the earnings come in better than expected. Were sales higher than forecast? Did margins improve? Was it due to a lower tax rate? Lower general and administrative costs (layoffs)?

There are a number of reasons why a company might spring a surprise. Let’s take a look at a few that recently reported stronger than expected earnings and see if we can figure out why it happened…

Yahoo! (Or Not)

On Tuesday, Yahoo! (Nasdaq: ) doubled up on analysts’ estimates, notching earnings per share of 16 cents, versus expectations of 8 cents. That was on a non-GAAP (Generally Accepted Accounting Practices) basis, though. Using GAAP, the company earned 10 cents per share - a penny more than in the same period last year.

Behind the flashy headline numbers, Yahoo actually experienced a 13% decline in sales. It offset that with a $120 million decrease in sales and marketing expenses and $50 million less in general and administrative expenses (most likely due to layoffs).

In addition, the company’s gross and operating margins were both lower than the corresponding earnings period in 2008.