Yahoo earnings beat on cost cuts, but gives no explanation on data breach impact on Verizon deal

Does it matter that Yahoo management declined to have the usual conference call with investors after it announced its third quarter earnings today?

Well, yes, because it means everyone is getting zero information from CEO Marissa Mayer about what gives with the massive hacking of 500 million accounts it suffered last year. That includes Verizon, which is supposed to pay close to $5 billion for the Silicon Valley Internet giant’s core business and which is also waiting for more data about the data breach.

The incursion caused Verizon’s top lawyer to say publicly last week that it opened up the deal to renegotiation.

Before that, the telecom giant will need a lot of questions answered, such as: What data did the hackers get? Was the corporate email of Yahoo also compromised? And, most importantly, what did Mayer know and when did she know it?

For now, it’s all anyone’s guess. But here’s one thing for sure: As it sunsets as an independent company, Yahoo’s business continues to contract despite cost cuts.

Analysts had expected the company to report earnings of 14 cents per share, excluding certain expenses, compared to 15 cents in the same period a year ago. Instead, Yahoo reported earnings of 20 cents.

It looks like a big beat, but it is due to cost cuts and not growth in its businesses. But adjusted EBITDA, which is real measure of performance, was down to $229.2 million from $244.2 million.

While revenue in its mobile, video, native businesses rose, the big moneymakers contracted. Display ad revenue was down seven percent and search revenue was down 14 percent.

Revenue was expected to rise to $1.3 billion, which is close to seven percent higher than last year, except when payments to partners is added in. Then it was expected to fall to $862 million, a 14 percent decline. Instead, it was lower at $857.7 million.


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