Published: Thu, October 20, 2016
Economy | By Melissa Porter

Yahoo profit beats Wall St., some analysts worry over effect of hack

Yahoo profit beats Wall St., some analysts worry over effect of hack

Profit was slightly up.

Still, analysts were split on whether the results dispelled doubts about the deal going through.

But this wasn't an ordinary quarter.

Yahoo Inc. (NASDAQ:YHOO) released its quarterly earnings results on Tuesday. This is a huge boost for the firm that had gone into a deal to sell their core business to Verizon (NYSE:VZ) recently.

On both the breach and the sale, Yahoo remained tight-lipped, forgoing its usual live webcast with analysts - presumably to dodge thorny questions.

But Marissa Mayer, Yahoo chief executive, said in a statement that the firm was proceeding with preparations for the merger and that it was working hard to regain users trust. Yahoo also said that the total number of its users is holding steady.

"It would have been an hour of 'Sorry, no comment, ' which probably would have been more frustrating", Khatibloo said. Analysts polled by Thomson Reuters estimated earnings of $0.14 per share. The digital content provider reported $0.20 earnings per share for the quarter, beating the consensus estimate of $0.14 by $0.06.

Verizon plans to combine Yahoo's search, email and messenger and advertising technology tools with its AOL unit, which it began the process to acquire earlier this year for $4.4 billion.

On Tuesday shares of Yahoo! Inc. (NASDAQ:YHOO) ended trading lower at $41.44 with -0.43%. "If you ran a restaurant, of course you'd get an extra $100,000 in sales if you spent an extra $150,000 in marketing, but that doesn't mean your restaurant is doing great".

Yahoo said on Friday it would not hold a call or webcast after the release of the results, citing the Verizon deal. Majority had projected poorer results for the business. And she said that if Verizon can show the scandals have cost Yahoo a sizable chunk of users, Verizon will be "definitely asking for a bigger break than a billion dollars".

Over the last twelve months Yahoo!

However, Verizon said last week that a recently revealed hack affecting 500 million Yahoo customers worldwide in late 2014 could have a "material" effect on the US$4.8 billion deal. Finally, Picton Mahoney Asset Management acquired a new position in shares of Yahoo during the second quarter valued at about $199,000. The buyout was announced in July, just a few months before the Yahoo data breach was made public. Eight analysts surveyed by Zacks expected 860.9 million dollars (£700 million).

Yahoo Inc. (NASDAQ:YHOO) had its price objective raised by investment analysts at Mizuho from $38.00 to $42.00 in a note issued to investors on Wednesday. "In a scuttled deal, can Yahoo again open up the process to other bidders?"

"I think the big challenge is can Verizon do a better job of automating and really monetizing Yahoo!'s overall audience of 700 million plus users on a monthly basis.", Josey noted.

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