Yahoo Sees Verizon Deal Taking Longer Than Expected -- Update

By Deepa Seetharaman 

Yahoo Inc., subject of two huge data breaches that have cast a shadow over its deal with Verizon Communications Inc., pushed back its expected closing date for the transaction, citing "work required to meet closing conditions."

Verizon's $4.8 billion deal to buy Yahoo's main business had been expected to close in the first three months of 2017. But the deal has come into question after the disclosure of two massive hacks since the transaction was announced.

On Monday, Yahoo said it is "working expeditiously to close the transaction as soon as practicable" in the second quarter and said it has been continuing to work with Verizon on integration planning.

After the sale of its core internet business, the remaining company will be called Altaba Inc., which will contain Yahoo's stake in Alibaba Group Holding Ltd. and Yahoo Japan.

In September, Yahoo disclosed the 2014 theft of personal data of more than 500 million user accounts. The stolen data included names, email addresses, dates of birth, telephone numbers and encrypted passwords, Yahoo said. In October, Yahoo shared a chart that showed usage of its email product rose slightly after the first breach was reported.

Then in mid-December, Yahoo said it was hit with a different massive data breach in 2013 that compromised private information of more than 1 billion user accounts.

The second hack, separate from the 2014 breach disclosed in September, amplified concerns among investors that the deal was at risk of falling apart. Before Yahoo disclosed its second, larger hack, Verizon was close to an agreement with Yahoo on how to handling future hacking liabilities, The Wall Street Journal previously reported. The second hack put things on hold.

Also unclear is the potential effect of U.S. authorities' investigation, reported Sunday by The Journal, into whether the two breaches should have been disclosed sooner.

Separately, Yahoo reported fourth-quarter earnings of $162 million, or 17 cents a share. A year earlier, the company had booked a huge loss because of a $4.46 billion goodwill impairment charge.

On an adjusted basis factoring out certain items, per-share earnings were 25 cents, up from 13 cents a share in the fourth quarter of 2015. Analysts, on average, had expected 21 cents per share, according to Thomson Reuters.

Yahoo generated $1.47 billion in revenue, up from $1.27 billion the previous year. The company was projected to report $1.38 billion in revenue. Fourth-quarter revenue excluding commissions paid to partners for web traffic fell 4.2% to $960.1 million, marking the eighth decline in the past nine periods for the key metric.

As it did the previous quarter, Yahoo said it would be skipping its earnings conference call "due to the pending transaction" with Verizon.

Shares of the company rose 0.8% to $42.70 in after-hours trading.

Write to Deepa Seetharaman at [e-mail]

(END) Dow Jones Newswires

January 23, 2017 16:50 ET (21:50 GMT)

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