Wall Street gave Yelp (YELP) an enthusiastic review, as the local business ratings service announced an asset sale, a stock buyback and an earnings beat after hours on Thursday.
Shares of Yelp Inc. gained more than 18% to $37.07 in late trading on Thursday, as the San Francisco company is selling its Eat24 food delivery service to GrubHub (GRUB) for $287.5 million in cash. The companies also formed a partnership in which Yelp will integrate GrubHub's food ordering platform into its offerings.
Yelp Co-founder and CEO Jeremy Stoppelman said the deal and the partnership would expand ordering and delivery options. The deal also provides Yelp with a financial return, as the sale price more than doubles the $134 million in cash and stock that Yelp paid for Eat24 in 2015.
Alongside the asset sale, Yelp said that it earned 9 cents per basic share in the second quarter, doubling earnings of 4 cents per share in the same quarter a year ago. Wall Street expected a loss of 3 cents per share.
Yelp's Net revenue grew 20% to $208.9 million in the second quarter, just topping forecasts of $205 million.
Yelp also said that its board approved a $200 million share buyback.
GrubHub Inc. dropped 1.2% after hours to $47.75 after the close.
Chicago-based GrubHub reported earnings of 26 cents per share in the second quarter, in-line with forecasts. Revenues increased by 32% to $158.8 million, slightly above Wall Street expectations.
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