Yahoo Beats Expectations on Earnings, Deal With Verizon Delayed

Despite a financial performance that was better than had been expected, Yahoo delayed its closing with Verizon it announced on Monday.

The company announced that its acquisition by telecommunications giant Verizon would not be closing until it was practicable during the second quarter due to work necessary to meet conditions for closing.

Last July, Verizon announced it would purchase the core businesses of Yahoo as it appeared to broaden its scale of media offerings at AOL and said it expected the deal to close during the first three months of 2017.

However, since that time, two hackings were disclosed with each being unprecedented in size and increased doubts about its deal.

The U.S. Securities and Exchange Commission has been investigating whether Yahoo should have reported the two breaches in 2013 and 2014 to investors much sooner than they did.

Yahoo’s Chief Executive Marissa Mayer did not address the issue directly or confirm the SEC investigation in the release of earnings for Yahoo. However, she did say that the commitment by Yahoo to its user’s security was unwavering.

In October, Yahoo said the amount of messages that were sent as well as received on mail at Yahoo moved up following the first breach notification, but the release on Monday did not provide any update related to the second breach.

The company reported earnings for the quarter that beat expectations by analysts on Monday and revenue that exceeded forecasts by Wall Street.

The company posted adjusted per share earnings for the fourth quarter of 25 cents, with revenue reaching $1.47 billion.

Analysts were expecting adjusted earnings to be 21 cents per share with revenue reaching $1.38 billion.

The just ended quarter was up from one year ago during the same quarter of 13 cents per share with revenue of $1.27 billion when the company posted a goodwill impairment of $4.46 billion.

Though the prices declined for display ads, Yahoo exceeded Wall Street expectations in display ad revenue, and beat expectations easily for search revenue in the quarter.

The overall number of display advertisements sold was up 4% and the ad search price per click rose by 18%.

Display revenue reached $573 million in the quarter, which was higher than the expected $568 million by analysts.

Search revenue reached $767 million, above the expected revenue of $698.7 million forecasted by Wall Street.

On Monday during afterhours trading, shares of Yahoo were higher by one-half of one percent, while Verizon shares remained unchanged.

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