Yahoo! Awaits Final Bids as It Prepares to Announce Q2 Results

Final bids for Yahoo! are reportedly due July 18, when the struggling internet company will also post second-quarter earnings.
By Jaewon Kang ,

At Yahoo! (YHOO) , the waiting continues.

The former Internet darling company is nearing the finish line of its auction as it plans to report second-quarter earnings next week. 

Yahoo!, which has struggled to turn itself around over the past several years, is expecting final bids for the company on Monday, July 18, The New York Times reported Thursday.

The Sunnyvale, Calif.-based company launched a sale in February after months of pressure from activist Jeffrey Smith's Starboard Value. But the auction hasn't been smooth sailing.

Yahoo! had to delay the first-round bid deadline and also continued to butt heads with Starboard even as it began exploring a sale. Starboard even launched a proxy fight to swap out the entire board of directors by nominating a slate of nine members. The company ultimately reached an agreement, however, to add a minority slate of four new board members -- Tor Braham, Eddy Hartenstein, Richard Hill and Smith.

Analysts are expecting Yahoo!'s core business to garner between $3 billion to $5 billion.

Shares of Yahoo! are down about 0.2% mid-day Friday to $37.88.

Meanwhile, Yahoo! is scheduled to report second-quarter earnings on July 18 after the market closes.

"We expect 2Q16 earnings to be relatively in line with our/consensus expectations, although we will be most focused on any updates regarding Yahoo!'s strategic alternatives as we believe a decision is likely to be made soon," wrote JMP analyst Ronald Josey wrote in a Friday note.

Apart from sale details, the areas of focus for the second quarter will be Yahoo!'s Search revenue, progress with its Gemini ad platform and paid click growth (the number of times users clicked on an ad). Key questions will also include whether video monetization has stabilized from the first quarter, and how much revenue the company's MaVeNS group will post. MaVeNS is a term Mayer created that refers to Yahoo!'s areas of current focus -- mobile, video, native and social.

Wall Street is expecting Yahoo! to post net revenue of $840 million and earnings per share of $0.02.

U.S. unique visitors to Yahoo! sites across desktop and mobile declined about 4% year-over-year in the second quarter, RBC Capital Markets Mark Mahaney pointed out in a Thursday note.

Still, the auction is nicely rolling on, he added, noting that CEO Marissa Mayer asserted at the June 20 annual shareholder meeting that she was "heartened by the level of interest in Yahoo!."

"We expect some sort of conclusion to the strategic process by the end of the summer," he wrote.

Verizon Communications (VZ) - Get Report  continues to be viewed as the favorite to win the bidding.

The telco, which acquired AOL for $4.4 billion last year and has touted its integration of another former dot-com darling, has publicly acknowledged its interest in Yahoo! But some industry followers have said AOL and Yahoo! are drastically different assets by nature and that it remains to be seen whether the New York-based telco would be able to pull off the same magic with Yahoo!

Also reported to be in the final mix of bidders are AT&T (T) - Get Report , private equity firms and Quicken Loans co-founder Dan Gilbert with backing from Warren Buffett's Berkshire Hathaway  (BRK.B) - Get Report.

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