YHOO - Yahoo! Inc.

Q3 ER Estimates:

Earnings Whisper: $0.15
Consensus: $0.14
Revenue: $860.88 Mil

Date & Time of ER:
Tuesday
Oct 18
4:45 PM ET

 

immediate reaction:

 

Yahoo earnings: 20 cents per share, vs expected EPS of 14 cents
Yahoo reported quarterly earnings that topped analysts' expectations and revenue that met estimates on Tuesday.

Shares rose about 0.36 percent after hours, while Verizon shares fell 0.14 percent.

The internet technology and media company posted third-quarter earnings per share of 20 cents, adjusted, on revenue of $1.31 billion. Analysts polled by Thomson Reuters expect Yahoo to report earnings of about 14 cents a share on $1.31 billion in revenue.

"In addition to our continued efforts to strengthen our business, we are busy preparing for integration with Verizon," CEO Marissa Mayer said in a statement. "We remain very confident, not only in the value of our business, but also in the value Yahoo products bring to our users' lives. To that end, we take deep responsibility in protecting our users and the security of their information. We're working hard to retain their trust and are heartened by their continued loyalty as seen in our user engagement trends."

Verizon agreed in July to buy Yahoo for $4.8 billion, after Yahoo struggled to adopt "strategic alternatives" for many months amid scrutiny from activist investors. The deal is expected to close in the first quarter of 2017, subject to approval of Yahoo shareholders and regulators.

But an extensive data breach at the company could have a material impact on the deal, Verizon's general counsel told Reuters last week.

Yahoo revealed in September that information of 500 million user accounts was stolen in late 2014, likely by a state actor. The breach built upon an August investigation of 200 million breached accounts.

Following the revelations, numerous media outlets, including the New York Times and Reuters, probed Yahoo's attitude about cybersecurity and its compliance with government surveillance. A report from the New York Post, unconfirmed by CNBC, indicated that Verizon may demand a price negotiation on their deal.

"That is just total speculation — we still see a real value to the asset there," Lowell McAdam, CEO of Verizon, said earlier this month at theInternet Association's Virtuous Circle conference in Menlo Park, California. "But in fairness, we're still understanding what was going on, to define whether it's a material impact to the business or not. But the industrial logic of doing this merger still makes a lot of sense ... I'm hoping we can get through all this stuff and get to the close [of the deal]."

On Tuesday, Bloomberg reported that the lack of progress on Yahoo's hacking probe has "dismayed" Verizon. Yahoo reiterated to CNBC that it was continuing to work towards integration with Verizon.

Despite a large user base, Yahoo has failed to cling to its share of digital ad revenue as rivals like Facebook and Alphabet continue to grow rapidly. Yahoo will capture 1.5 percent in total worldwide digital ad sales this year, down from 2.1 percent last year, eMarketer estimates.