Yahoo Quarterly Earnings

The internet search engine posted sinking revenue again while simultaneously beating the analysts' expectations

On Tuesday, the internet search giant, Yahoo! Inc., reported its earnings which, once again, showed the shrinking revenue of the company. But, the CEO, Marissa Mayer has said that she is actively involved in making a “beneficial corporate sale” possible. She also acknowledged the company’s shareholders as its “top priority.”

The struggling company reported EPS of $0.8 which was significantly lower than the EPS it had reported in the last year’s same period of $0.15. Additionally, the revenue of the company shrank to $1.09 billion, in comparison with year-earlier figure of $1.23 billion.

Still, the company’s results were slightly better than the analysts’ expectations. According to Thomson Reuters’ consensus estimate, Wall Street analysts project the Internet search portal to declare EPS of $0.7 on revenue of $1.08 billion.

On the conference call, the CEO expressed that the company has had a fairly good start but she also emphasized the point that the company’s management has put the shareholders at top and therefore it is urgently dealing with the auction process.

She said that the company’s management and those charged with governance are dedicated to maximize the shareholders’ value and are open to “any strategic alternatives.” The deadline for preliminary bids passed this Monday however Ms. Mayer didn’t disclose anything regarding the bidding details nor identify any bidders.

Sources privy to the matter, however, have leaked the names of the potential bidders. Verizon Communications Inc., buyout firm TPG, and U.K. publisher Daily Mail are among the few bidders who have submitted their proposals. People familiar with the matter has also revealed that former Yahoo CEO Ross Levinsohn and investor groups like Vista Equity Partners and Bain Capital have also submitted their bids. In addition to them, around the time of Yahoo’s bidding deadline, two private-equity firms Advent International and Silver Lake had shown interest in the bidding process too.

The sources close to the matter added on that the proposed biddings range between $4 billion and $8 billion.

The Silicon Valley Internet search portal has been under a lot of pressure to speed up its process of having an appropriate sale before the annual shareholder meeting this summer. It is probable that the investor may vote in favor of Starboard Value LP’s suggestion of replacing the entire board with new directors. Currently, the board has nine executives.

Earlier, Starboard has complained about the slow progress the company made in the sale and the heavy influence of Ms. Mayer in the sale process as it is likely to create a conflict of interest in the process. According to Wall Street Journal, several people familiar with the matter told it that many potential buyers have been irritated by the company’s managers lacking of providing detailed answers about the company’s business prospects. Probably this is the reason that an analyst at Cantor Fitzgerald, Youssef Squali said in an interview that, “There is a fair amount of skepticism about their willingness to really sell the business.”

Ms. Mayer however said that she and the board have been actively involved in the process and that the company is “moving expeditiously.’

The time will tell whether the company was able to make adequate financial sale. As of now, Yahoo! Inc.’s stock closed at $36.33.