Yahoo Inc reported better-than-expected quarterly adjusted profit on Tuesday, a boost for the beleaguered company whose deal to sell its core business to Verizon Communications Inc has been shaken by a massive data breach.
Verizon’s general counsel said last week that the hack, which affected at least 500 million email accounts in 2014, could have a material impact, possibly allowing Verizon to withdraw from the $4.83 billion deal. Tuesday’s results provided at least an initial indication that the data breach has not led to a quick exodus of Yahoo customers, as some had feared. Customer trends showed growth in pageviews and email usage, Yahoo said.
Another positive sign for Yahoo was that revenue from Mavens – the mobile, video, native and social advertising units that Chief Executive Marissa Mayer touts as its emerging businesses – rose 24.2 percent to $524 million. Still, the business showed continuing declines in major revenue categories. Gross search revenue fell 14.1 percent to $752.5 million.
Total revenue rose 6.5 percent to $1.31 billion, just beating the average analyst estimate of $1.30 billion. However after deducting fees paid to partner websites, revenue fell to $857.7 million from $1 billion. Yahoo said it would not hold a call or webcast after the release of the results, citing the Verizon deal. Analysts at Needham & Co said in a note on Tuesday that decision troubled them, given doubts cast over the Verizon deal by the data hack, and they cut their rating on Yahoo to ‘hold’ from ‘buy’.