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TechYelp

Yelp Shares Spike 19% on Plans to Sell Food Ordering Business

By
Reuters
Reuters
By
Reuters
Reuters
August 3, 2017, 5:38 PM ET
Yelp Inc. Illustrations Ahead of Earnings Figures
The Yelp Inc. application is displayed on an Apple Inc. iPhone 5s in this arranged photograph in Washington, D.C., U.S., on Friday, April 25, 2014. Yelp Inc. is expected to release earnings figures on April 30. Photographer: Andrew Harrer/Bloomberg via Getty ImagesPhotograph by Andrew Harrer — Bloomberg via Getty Images

Yelp said on Thursday it would sell its Eat24 business to Grubhub for $287.5 million in cash, as it posted revenue that beat expectations, news that sent Yelp’s shares up 19%.

The consumer review website operator also said its board had authorized a $200 million share repurchase program.

Shares of Grubhub, meanwhile, fell 7% in extended trade. The online food delivery platform reported second-quarter revenue up 32% to $159 million, slightly above the $158 million expected on average by analysts, according to Thomson Reuters data.

Yelp said it would enter a long-term strategic partnership in which it would integrate online ordering from restaurants on Grubhub’s site.

Yelp’s second-quarter revenue rose 20% to $209 million, above the $205 million expected by analysts, on average.

Net income of $7.6 million far exceeded $400,000 a year earlier. Earnings per share were 9 cents per share, versus 1 cent per share, a year ago.

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Looking to the third quarter, Yelp said it expects revenue of $217 to $222 million. Analysts have been expecting $219.67 million.

Shares rose to $37.28 in after-hours trade, up nearly 19%, after closing at $31.37.

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