Yahoo Inc's first-quarter results beat Wall Street estimates by a hair on Tuesday in what was taken as a good sign for the web pioneer's plan to auction its core business.
Under pressure from activist shareholder Starboard Value LP and others, Yahoo has ramped up a sale of its media, email and other web businesses. Yahoo's overall fortunes have failed to revive under Chief Executive Marissa Mayer, although she points to good results in key areas including social media.
Mayer in a call with analysts drilled the message that she was focused on the sale and was meeting with investors and potential bidders, a contrast with the previous quarter, when she also discussed plans to spin off the company's core business from Yahoo Japan and its stake in Chinese e-commerce giant Alibaba Group Holding Inc.
The first round of bids closed on Monday. Verizon Communications Inc has put in an offer and is set to make a short list, according to sources. Private equity firms Apax Partners LLP, TPG Capital LP, Bain Capital LLC, Apollo Global Management LLC and Warburg Pincus LLC have also submitted first- round bids.
Yahoo aims to close the sale in June, sources said. That would be before the annual meeting where Starboard wants shareholders to replace the board.
Yahoo shares rose nearly 1 percent to $36.66 in light volume in extended trading on Tuesday.
"The numbers are providing some comfort things aren't falling off a cliff," said Ronald Josey of JMP Securities. "If you're bidding for this company it's nice to see them doing what they said they would do."
Revenue fell 11.3 percent to $1.09 billion in the first quarter, the first decline after four straight quarters of growth. The result squeaked by analyst estimates of $1.08 billion, according to Thomson Reuters I/B/E/S.
Yahoo reported a net loss of $99 million, or 10 cents per share, compared with a profit of $21 million, or 2 cents per share, a year ago. On an adjusted basis, Yahoo earned 8 cents per share, topping Wall Street's target of 7 cents.
"The results should build a little bit of confidence for investors that the sale is going to be completed," said Murali Sankar, an analyst at Boenning & Scattergood Inc.
Mayer told analysts a spin-off was still possible, but she said that only in response to a direct question on the call. That showed she was focused on the sale, said Axiom Capital analyst Victor Anthony.
Yahoo said it sees second-quarter GAAP revenue of $1.05 billion to $1.09 billion -- below analysts' view of $1.10 billion.