San Francisco: Yahoo Inc
Verizon`s general counsel said last week that the hack, which affected at least 500 million e-mail accounts in 2014, could have a material impact, possibly allowing Verizon to withdraw from the $4.83 billion deal.
Tuesday`s results provided at least an initial indication that the data breach has not led to a quick exodus of Yahoo customers, as some had feared. Customer trends showed growth in pageviews and e-mail usage, Yahoo said.
Another positive sign for Yahoo was that revenue from Mavens - the mobile, video, native and social advertising units that Chief Executive Marissa Mayer touts as its emerging businesses - rose 24.2 percent to $524 million.
Still, the business showed continuing declines in major revenue categories. Gross search revenue fell 14.1 percent to $752.5 million.
Total revenue rose 6.5 percent to $1.31 billion, beating the average analyst estimate of $1.30 billion, according to Thomson Reuters I/B/E/S. But after deducting fees paid to partner websites, revenue fell to $857.7 million from $1 billion.
Yahoo said on Friday it would not hold a call or webcast after the release of the results, citing the Verizon deal.
Analysts at Needham & Co said in a note on Tuesday that decision troubled them, given the doubt cast over the Verizon deal by the data hack, as they cut their rating on Yahoo to `hold` from `buy`.
Yahoo`s shares were up about 1.4 percent in extended trading after the close on Tuesday.
For the third quarter ended Sept. 30, net income attributable to Yahoo rose to $162.8 million, or 17 cents per share, from $76.3 million, or 8 cents per share, a year earlier.
Excluding some items, the company earned 20 cents per share, beating analysts` average estimate of 14 cents.
Verizon plans to combine Yahoo`s search, email and messenger assets as well as advertising technology tools with its AOL unit, which it bought last year for $4.4 billion.
The deal would transform Yahoo into a holding company, with a 15 percent stake in Chinese e-commerce company Alibaba Group Holding Ltd
The deal is expected to close in early 2017, after which Yahoo plans to change its name and become a publicly traded investment company.