Yahoo! Inc. (NASDAQ:YHOO) reports its 2Q2016 today after markets close. In the report, analysts and investors are looking to see what the company says about Mavens businesses, which is the short name of Yahoo’s operations that touch on mobile, video, native and social. The reason the focus is on Mavens is that they are considered Yahoo’s most important businesses.
Yahoo’s CEO, Marissa Mayer, has repeatedly cited Mavens as the company’s new growth engine. But growth of Mavens revenue dramatically slowed down in 1Q2016. For example, Mavens revenue rose only 7% YoY. That compared with 58% growth in the same period a year earlier and 26% growth in the prior quarter.
As such, the market will be looking to see if growth of Mavens is shrinking further or there are signs of improvement.
Mayer takes credit for growing Mavens
The credit that Mayer receives is that she has grown the Mavens business from almost nothing. Before Mayer came in to head Yahoo in 2012, Mavens revenue was almost nonexistence, but the company reported $1.6 billion in Mavens revenue in 2015.
If Mavens revenue is seen to be improving, Yahoo shares could jump considering the premium that analysts and investors are putting on the businesses. But if Mavens revenue growth continues to slump, investors could send Yahoo shares down after today’s report.
Yahoo is targeting to generate Mavens revenue of $1.8 billion this year compared $1.6 billion in the previous year.
Auctioning of Yahoo
Yahoo is also expected to share details about the buyout bids it has received for its core businesses. It has been reported in the media that companies such as AT&T Inc. (NYSE:T), Verizon Communications Inc. (NASDAQ:VZ) and a host of other private-equity firms have shown interest in Yahoo’s Internet assets earmarked for sale.
But there is no guarantee that Yahoo will endorse the bids. So the update on the sales programs is something investors and analysts will be waiting to hear.
What Wall Street expects in 2Q
Analysts on the average are modeling EPS of $0.10 for Yahoo in 2Q. That compares with EPS of $0.16 in the comparable quarter a year ago. Revenue for the latest 2Q is estimated at $1.08 billion, which is about 13.4% below the revenue reported by the company in the year-ago quarter.