Verizon: Data center sale going nicely. Yahoo! bid? Not so much
Lawyers now working to decide how much to knock off the Purple Palace offer
US telecom giant Verizon says it has formally begun talks with Yahoo! on adjusting the terms of their merger.
Speaking to analysts during the company's fiscal Q3 2016 earnings call, CFO Fran Shammo said that Verizon's lawyers had their first meeting with Yahoo! brass yesterday to discuss the breach of a half billion Yahoo! Mail accounts and how the incident will affect the $4.8bn acquisition offer.
"We are still evaluating what it means for this transaction," Shammo told analysts.
"This was an extremely large breach that has received a lot of attention from a lot of different people, so we have to assume it will have a material impact on Yahoo!
The Verizon CFO also noted comments made last week by general counsel Craig Silliman suggesting that Verizon could opt to call off the deal entirely if it finds the incident has significantly damaged the value of Yahoo!.
Execs at the Purple Palace, meanwhile, have maintained that they "remain confident" in the company's valuation.
On a more encouraging front for Verizon, the telco says the planned sale of its data center facilities is going well and, if all goes according to plan, it could announce a deal sometime next quarter.
Other high- (and low-) lights of the quarter include:
- Revenues of $30.9bn were down 6.7 per cent on the year-ago quarter.
- Net income of $3.7bn was down 10 per cent from Q3 2015.
- Earnings per share of $0.89 met analyst estimates.
- Wireless revenues of $22.1bn were down 3.9 per cent, with the company having an estimated 113.7 million total wireless connections on its network.
- Wireline revenues were $7.7bn, down 2.3 per cent from the year-ago quarter.
Shammo did note that Verizon's mobile numbers took a hit this quarter, thanks to Samsung's unexpected move into the portable pyrotechnics market.
"We were off to a really good start with the Samsung Note 7, and unfortunately there was a total recall of that phone, which definitely impacted our growth," he said.
"Historically, Verizon has always been the number one leader in high-end Samsung phones, so that certainly impacted us."
Verizon shares closed the day down 2.46 per cent at $49.14. ®