Yahoo lost $99 million, or 10 cents a share, in the first quarter, but CEO Marissa Mayer cheered investors by announcing efforts to sell its core business are making “substantial progress.”
The loss compared with a profit of $21 million, or 2 cents per share, a year ago. But on an adjusted basis, Yahoo earned 8 cents per share, topping Wall Street’s target of 7 cents.
Revenue fell 11.3% to $1.09 billion in the first quarter, the first decline after four straight quarters of growth, but beat analysts’ estimates of $1.08 billion.
“Our 2016 plan is off to a solid start as we continue to focus on driving efficiency, lowering costs, and improving long-term growth,” Mayer said in a news release. “In tandem, we made substantial progress towards potential strategic alternatives for Yahoo. Our board, our management team, and I are completely aligned on this top priority for shareholders.”
In trading Tuesday, Yahoo shares were up more than 4% at $37.90, their highest level since July.
Under pressure from activist investor Starboard Value, Yahoo has been shopping its core business, which includes search as well as digital media units such as Tumblr, Yahoo Finance, and Yahoo News.
First-round bids were due Monday and bidders reportedly included Verizon, private equity firm TPG, and a joint offer from Bain Capital and Vista Equity Partners. According to The Wall Street Journal, most of the offers came in the range of between $4 billion and $8 billion.
Verizon is considered the front-runner. Greg Sterling, vice president of strategy at Local Search Association, said the company might combine Yahoo with AOL, which it acquired for $4.4 billion.
“People have this attitude that Yahoo is a faded company,” he told USA Today. “It still has a reach, brand, and audience on the internet surpassed only by Google and Facebook.”
According to CNBC, Mayer is betting that Yahoo’s struggling legacy desktop advertising business would soon be overtaken by its growing mobile, video, native advertising, and social media businesses. In the first quarter, those businesses brought in 38% of Yahoo’s overall sales.