Yahoo’s first quarter revenue fell 11.3 per cent and it reported a net loss of $99 million, as the US internet company received bids for its core assets and is now shortlisting those who will proceed to the second round, in hopes that the auction can be completed by June.
Sales in the period came in at $1.09 billion, down from $1.27 billion a year ago, while the loss compared with a $21 million profit in Q1 2015.
Mobile revenue came in at $260 million, up from $234 million a year ago, but Radio Free Mobile (RFM)’s Richard Windsor wasn’t impressed. “I see weakness in mobile,” Windsor wrote, adding that he expected mobile revenue of $270 million.
“In Q4 15, RFM calculated that Yahoo managed to monetise 12 per cent of the opportunity that it has in mobile, which fell to 11 per cent in Q1 16,” he noted.
No two offers were the same, Reuters reported, and sources believe Verizon is set to be the leading candidate in the shortlist, facing competition from other companies and private equity firms.
Apax Partners, TPG Capital, Bain Capital, Apollo Global Management and Warburg Pincus were among the private equity firms that submitted bids in the first round, the report said, adding that Yahoo may decide to allow buyout firms to team up in the second round.
Previously interested parties like Time, Comcast and Rakuten decided not to make an offer.
On Yahoo’s earnings call, CEO Marissa Mayer said Yahoo had been “running a quality process designed to keep interested parties engaged.”
“Over the past two months, (Chief Financial Officer Ken Goldman) and I and the rest of the management team have spent time in person and on the phone with interested participants, including some of the most well-known, respected names in the industry,” she added.
As for the quarterly results, she said “our 2016 plan is off to a solid start as we continue to focus on driving efficiency, lowering costs, and improving long-term growth.”
“The results should build a little bit of confidence for investors that the sale is going to be completed,” Reuters quoted Murali Sankar, an analyst at Boenning & Scattergood, as saying.