Yah-ooh dear: Verizon reports five per cent revenue fall

 
William Turvill
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Verizon has agreed a $4.83bn deal for Yahoo's internet business (Source: Getty)

Verizon Communications, the US company that yesterday announced a $4.83bn (£3.7bn) deal for the internet business of Yahoo, has reported a more than five per cent drop in revenue.

The figures

Total operating revenues for the second quarter of 2016 were $30.5bn, down 5.3 per cent on the same period in 2015.

Analysts had expected the company to report a revenue of $30.94bn, according to Thomson Reuters.

Earnings per share (EPS) were 17 cents, down from $1.04 the year before.

Read more: Yahoo + AOL = Verizon's online media now has more eyeballs than Google

Verizon said that AOL, acquired for $4.4bn in May last year, “delivered strong revenue growth” during the period.

Verizon reported an earnings before interest, taxation, depreciation and amortisation (Ebitda) of $8.5bn.

Verizon's share price was down around one per cent to $55.40 in pre-market trading on Tuesday.

Verizon Verizon | mobile image

Why it’s interesting

The results have been published the day after Verizon announced it had won the race for Yahoo’s internet business, including its online search, email and instant messaging areas.

Read more: Veri-hoo? The $4.83bn Verizon Yahoo deal is go

Verizon was thought to be in competition with a number of private equity houses for the business. Even the publisher of the Daily Mail emerged – briefly – as an interested party during the bidding process.

Verizon said the deal, expected to be completed in the first quarter of 2017, signalled “we are scaling up to be a major competitor in mobile media”.

What the company said

Chairman and chief executive Lowell McAdam:

Yahoo is a complementary business to AOL, giving us market-leading content brands and a valuable portfolio of online properties and mobile applications that attract over one billion monthly active consumer views. We expect this acquisition to put us in a great position as a top global mobile media company and give us a significant source of revenue growth for the future.

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