Telecommunications giant Verizon, which was in the news recently for its Yahoo purchase, has reported its third quarter earnings. Amid mixed results from the quarter, Verizon has said that it is still evaluating its decision about its Yahoo purchase, and the question of asking for a discount on the original, agreed upon price.
Verizon agreed to buy Yahoo for $4.83 billion recently. The announcement of the deal was shortly followed by rumors and then another declaration from Yahoo, in which it accepted that it had been subject to a huge e-mail hack. The hack, which is still under investigation, is thought to have affected hundreds of millions of Yahoo accounts and has unsurprisingly, soured the deal for Verizon.
Verizon is now seeking a discount in the originally accepted price of $4.83 billion with the amount expected to go up to $1 Billion. Predictably, Yahoo is not happy at the prospect and we may see the terms of the deal change significantly before it finally — if it does at all — concludes.
Speaking on the topic, Verizon Chief Financial Officer Fran Shammo told TechCrunch,
Look, (CEO Lowell McAdam and Verizon general counsel Craig Silliman) have both commented on this recently,” said Chief Financial Officer Fran Shammo. “Let me just reiterate what they have said — we are still evaluating what it means for the transaction.
He also said that the carrier’s lawyers had initiated dialogue with Yahoo over the issue and that the breach was almost certain to have tangible and material impact upon Yahoo’s affairs.
Meanwhile, the quarterly financial report produced mixed results for America’s largest carrier. While the company beat estimates with non-GAAP earnings at $1.01 per share — as opposed to the $0.99 that was predicted — its revenues for the quarter stood at $30.9 billion, less than the $31.09 billion that was being expected. Both the revenue figure and the EPS were down by 6.7 percent and 3 percent respectively, as compared to a year ago.
Wireless revenues also went down by 3.9 percent and stood at $22.1 billion. The decline may have been caused by an increasing customer tendency to purchase unsubsidized device payment plans.
Worryingly perhaps, the iPhone sale should have boosted the company’s financial results. However, they did not appear to have had much of an impact, as far as the company’s finances were concerned. Verizon is handling Google’s Pixel devices as well, so maybe it will have better luck with them.
As far as the Yahoo and Verizon deal is concerned though, it may be a while before the companies finally reach a settlement that is agreeable to both the parties.