ValueClick Shares Down 7% As Q3 Results Miss Estimates, Weak Outlook

(RTTNews) - Shares of ValueClick, Inc. (VCLK) dropped seven percent in extended trading on Tuesday after the Online advertising service provider reported results for the third quarter that missed analysts' expectations. The company also provided earnings and revenue guidance for the fourth quarter, below Street view.

Further, the company reported a profit for the quarter that declined from last year, reflecting discontinued operations.

Separately, ValueClick announced its intention to pursue the divestiture of owned & operated websites or O&O segment as part of its focus on aligning its businesses with the 'One ValueClick' strategy. The O&O results are now reflected as discontinued operations for both periods. The company has retained Wells Fargo Securities, LLC as its financial advisor in connection with the potential divestiture.

The O&O segment operates a broad range of popular content and ecommerce websites including Investopedia, PriceRunner, Smarter.com, SymptomFind and CouponMountain.com.

"We delivered strong profitability and cash flow in the third quarter, driven by a continued mix shift into our higher value added offerings. Solid year-over-year growth in our CRM, affiliate marketing, mobile, video and cross-device solutions was offset by weakness in our insertion order display business within the Media segment," President and CEO John Giuliani said in a statement.

The Westlake Village, California-based company reported net income of $18.0 million or $0.25 per share for the second quarter, lower than $23.5 million or $0.31 per share in the prior-year quarter.

Net income from continuing operations grew to $22.09 million or $0.30 per share from $16.62 million or $0.22 per share last year.

Excluding one-time items, adjusted income for the quarter was $28.19 million or $0.38 per share, compared to $24.52 million or $0.32 per share in the year-ago quarter.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.40 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter increased 2 percent to $134.10 million from $130.91 million in the same quarter last year, but missed fifteen Wall Street analysts' consensus estimate of $166.53 million.

By segment, affiliate marketing revenues grew 11 percent year-over-year to $38.9 million, reflecting continuing growth in transaction volumes and clients.

Meanwhile, media revenue edged down 1 percent to $95.3 million from the year-ago quarter as continuing solid growth in CRM, mobile, video and cross device solutions was offset by a decline in ValueClick's traditional insertion order-driven display business.

Looking ahead to fourth quarter, ValueClick expects adjusted earnings in a range of $0.57 to $0.58 per share, on projected revenues between $166 million and $171 million. Analysts currently expect earnings of $0.59 per share for the quarter, on revenues of $211.40 million.

"We are making great progress advancing our 'One ValueClick' integration, an important companywide effort that will further strengthen our ability to serve as a strategic partner for advertisers across all business lines," Giuliani added.

VCLK closed Tuesday's regular trading session at $19.94, up $0.05 or 0.25% on a volume of 2.85 million shares. However, the stock lost $1.34 or 6.72% in after-hours trading.