Yahoo, Amazon, Citi: Business news in brief, Wednesday 25 January

Verizon deal to be completed in Q2 says internet giant; Amazon makes concessions on e-books in European anti-trust case; US bank to make Brexit decision in first half of 2017

Profits and revenues at Yahoo beat expectations under Marissa Mayer, the chief executive (Reuters)

Yahoo beats Wall Street view, sees Verizon deal closing in second quarter

Yahoo on Monday reported better-than-expected quarterly profit and revenue, and said the sale of its core internet business to Verizon Communications should be completed in the second quarter, allaying some investor concerns that the deal might collapse.

The $4.8bn (£3.9bn) Verizon transaction had originally been expected to close in the first quarter but was delayed by the disclosure of two major cyber breaches that exposed information from more than a billion Yahoo accounts.

The Securities and Exchange Commission has opened a probe into whether Yahoo's data breaches should have been disclosed sooner to investors, the Wall Street Journal reported on Monday.

Yahoo said Monday that it has spent approximately $10m related to a 2014 security breach announced in September and a 2013 breach announced in December.

Operating results for the fourth quarter, featuring a 15 per cent gain in revenue from a year ago, appeared to provide some belated vindication of embattled Yahoo chief executive Marissa Mayer's strategy. The company’s shares rose 1.2 per cent to $42.90 in heavy after-market trading.

Revenue from Mavens – the mobile, video, native and social advertising units that Mayer has long touted as key emerging businesses – rose 25 per cent to $590m.

Gross search revenue fell 6 per cent to $821m as Yahoo struggled to win back market share from bigger rivals such as Alphabet Inc's Google.

Reuters

Amazon offers to scrap e-book clauses to settle EU antitrust probe

US online retailer Amazon has offered to alter its e-book contracts with publishers in a bid to end an EU antitrust probe and stave off a possible fine, the European Commission said on Tuesday.

Amazon, the biggest e-book distributor in Europe, proposed to drop some clauses in its contracts so publishers will not be forced to give it terms as good as those for rivals, the Commission said.

Such clauses relate to business models, release dates, catalogues of e-books, features of e-books, promotions, agency prices, agency commissions and wholesale prices.

The Commission opened an investigation into the company’s e-books in English and German in June 2015, concerned that such parity clauses make it harder for other e-book retailers to compete with Amazon by developing new and innovative products and services.

The EU competition enforcer gave rivals and customers a month to provide feedback before it decides whether to accept the proposal. Under EU antitrust rules, such settlements mean no finding of infringement nor fines which could reach 10 per cent of a company’s global turnover.

Amazon said it was pleased with the agreement but disagreed with the Commission's preliminary assessment, saying that e-books are not a separate market as they compete directly with print books and other forms of media.

Reuters

Citi to make decision on Brexit plans in first half: Europe chief

US bank Citigroup will make a decision on its Brexit contingency plans in the first half of the year and choose from a number of potential EU countries to relocate some investment banking business, the bank's European chief said on Tuesday.

“We will be making a decision in the first half of this year, it's a decision that every bank has to make in the first six months of this year,” James Cowles, Citi’s chief executive for Europe, the Middle East & Africa told the European Financial Forum conference in Dublin.

Along with fellow US bank Morgan Stanley, Citi has identified many of the roles that will need to be moved from Britain following its exit from the European Union, sources involved in the processes told Reuters last week.

Cowles said the bank was looking at where to establish a new broker dealer by either creating a new EU entity or through building up one of its existing entities.

“Our issue is with our broker dealer which is located in the UK and it will lose, presumably, passporting rights,” Cowles said.

“We've reached out, we've talked to regulators and people at government across many countries in Europe, including Ireland, Italy, Spain, France, Germany and the Netherlands and we're in the process of evaluating each one of them.”

Reuters

Etihad Airways boss who led acquisition strategy on way out

Etihad Airways said Tuesday that the chief executive of its parent company, who led an aggressive multi-year buying spree that saw the Mideast carrier snap up stakes in airlines from Europe to Australia, is leaving.

The Abu Dhabi-based airline gave no reason for James Hogan’s departure other than to describe it as part of a transition process started by the board of directors and the Australian last year. No replacement was named.

The move follows speculation about Hogan's possible exit and questions about Etihad’s ability to turn around struggling investment partners such as Air Berlin and Alitalia.

The equity stakes Hogan pursued help feed traffic into Etihad’s system and expand its route network as it competes against larger Gulf rivals Emirates and Qatar Airways.

But they also leave Etihad exposed to the problems and financial losses dragging down the older carriers it is now partly responsible for.

“They have to consume some significant management time on these airlines,” said airline analyst John Strickland of JLS Consulting.

Chairman Mohammed Fadhel al-Mazrouei said the company’s immediate priority is to continue a company-wide strategic review, suggesting that more changes could be in the works for the government-owned airline.

AP

British Gas to pay £9.5m for customer billing failings

Centrica-owned British Gas has to pay £9.5m in compensation to customers who faced billing problems after the household energy supplier upgraded its system in 2014, energy market regulator Ofgem said on Tuesday.

Ofgem said British Gas, the UK’s biggest energy supplier, had shown failings in its registrations, complaints handling and billing processes for business customers and over 6,000 new customers had experienced delays registering with the supplier.

The £9.5m pounds comprises payments to affected customers and payments to a charity to help energy customers in need, Ofgem added.

British Gas said it voluntarily reported the issues to Ofgem after it introduced the new IT billing system.

“We invested in a new billing system so we could improve the service we provide to our business customers,” British Gas said in a statement.

“At the time, this was a major undertaking - merging nearly 100 different systems into one. It didn’t go as smoothly as we would have liked so we reported this to Ofgem as a priority,” it added.

British Gas said the issues have now been resolved and it has restored a “very good quality of customer service”.

Reuters

Dixons Carphone notches 6% Christmas sales surge

Electricals and mobile phones giant Dixons Carphone hailed its fifth year in a row of Christmas sales growth after luring in shoppers with “ground-breaking” deals.

The group said it notched up a 6 per cent surge in like-for-like sales across stores in the UK and Ireland over the 10 weeks to 7 January, although 4 per cent of this was thanks to sales transferred from closed stores.

Dixons confirmed expectations for a “meaningful” hike in annual profits after its solid festive performance, in line with market forecasts for between £475m and £495m for the year to April 29.

Seb James, group chief executive of Dixons Carphone, said: “I am pleased to be reporting another good Christmas period of growth - our fifth consecutive year.”

He added: “This year, as a result of our scale in all of our markets, we were able to offer prices that were truly ground-breaking during both our Black Friday week and our annual Boxing Day week sales – while maintaining margins – and we believe that we have outperformed the market during the period.”

AP