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Yahoo takes $482M impairment charge on Tumblr, stays mum about sale


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Yahoo takes $482M impairment charge on Tumblr, stays mum about sale

Yahoo!Inc. executives remained optimistic about the company's future inthe face of nearly half a billion dollars of impairment charge, a largeryear-over-year net loss and an auction to sell its core assets.

"We took a hard, honest look at where we were and where wewant to be and have taken necessary steps to get there," Yahoo's CEO andPresident Marissa Mayer said during a July 18 earnings conference call.

The company is in a transition period to redefine itself whilesimultaneously auctioning off its core Internet assets. While theauction closed July 18, Mayer was mum about the process, saying there would beno announcements about the results for the day. Among the potential winners inthe bid reportedly were VerizonCommunications Inc., AT&T Inc., Quicken Loans Inc. Founder Dan Gilbert, along with threebuyout groups TPG, AdventInternational Corp. and a partnership of and

The company's revenue clocked in at $1.31 billion for thesecond quarter, up from the $1.24 billion in the year-ago quarter. Revenueex-TAC came in at $841.2 million for the quarter, down from $1.04 billion ayear ago. Adjusted EBITDA came in at $172.4 million for the second quarter,down from $261.7 million in the year-earlier period.

Yahoo reported a quarterly net loss attributable to thecompany of $439.9 million, or 46 cents per share, compared to a year-agoattributable net loss of $21.6 million, or 2 cents per share. On a non-GAAPadjusted basis, EPS came to 9 cents, down from 16 cents in the 2015 quarter.The company reported an operating loss of $489.7 million, compared to a loss of$44.8 million a year earlier.

The S&P Capital IQ consensus normalized EPS estimate forthe second quarter was 10 cents, while the GAAP estimate was zero cent.

Tumblr, the company's blogging platform, saw twice as many usersengaging with ads compared to the previous year, Mayer said. Close to 90% ofthe platform's daily active users accessed it on mobile. Despite the increases,the company disclosed that it took impairment charges totaling $482 million forTumblr. The company recorded a noncash goodwill impairment charge of $395million and a noncash intangibles impairment charge of $87 million related torelated to its Tumblr reporting unit.

Revenue from Mavens (mobile, video, native and social) growthstrategies grew to $504 million, up from the $401 million in the year-agoperiod. The company noted a change in revenue presentation added $119 millionto the segments revenue. The segment accounted for 40% of traffic-drivenrevenue for the quarter, up 4% year-over-year.

Gross search revenue came in at $765 million for the secondquarter of 2016, down 17% year over year from the $926.9 million in the June2015 period. GAAP Display Revenue was $470 million, marking a 7% year-over-yeardecrease.

Looking forward, CFO Kenneth Goldman forecast revenue at $1.28billion to $1.33 billion for the 2016 third quarter. Adjusted EBITDA isprojected to be between $190 million and $220 million, while non-GAAP operatingincome will clock in at $65 million to $95 million.

Though the company's stock bounced up and down in after-hourstrading following the second-quarter results, share prices remained steady.