ValueClick Shares Tumble As Q2 Profit Misses View, Issues Weak Outlook

(RTTNews) - Shares of ValueClick, Inc. (VCLK) tumbled more than 15 percent in extended trades Thursday after the online advertising service provider's second-quarter earnings missed analysts' expectations and it also forecast third-quarter results below Street view.

The Westlake Village, California-based company reported a 42 percent decline in profit for the second quarter as higher revenues and lower operating expenses were more than offset by an impairment charge.

John Giuliani, president and chief executive officer of ValueClick said, "Despite some top line weakness in the quarter from our insertion order-driven display business, we made great progress on our integration initiatives. In addition, our significant affiliate marketing client wins during Q2 represent a great addition to our roster of direct, strategic relationships with major advertisers and provide us with an even stronger base for sustainable, profitable growth in the years to come."

By segment, affiliate marketing revenues for the second quarter grew 9 percent from the year-ago period to $36.62 million, while media revenue edged up slightly to $91.49 million and revenue from owned & operated websites rose 8 percent to $31.66 million.

ValueClick's second-quarter net income was $11.88 million or $0.15 per share, down from $20.34 million or $0.25 per share in the same period last year.

ValueClick entered into a settlement agreement related to its note receivable from the sale of its promotional lead generation business in 2010. Under the terms of the settlement, the company received an upfront payment of $5.5 million in July 2013 and recorded a non-cash impairment charge of $22.6 million.

Adjusted net income for the quarter was $16.34 million or $0.21 per share, compared to $28.25 million or $0.35 per share in the year-ago period. On average, fourteen analysts polled by Thomson Reuters expected the company to earn $0.39 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter increased 4 percent to $159.76 million from $153.99 million in the same period last year. Analysts had a consensus revenue estimate of $166.17 million.

Total operating expenses declined 6 percent to $59.57 million from $63.38 million in the same period last year.

Looking ahead to the third quarter, ValueClick forecasts reported earnings of $0.30 to $0.31 per share, adjusted net income of $0.39 to $0.40 per share, and revenues of $164 million to $168 million. Analysts currently expect the company to report earnings of $0.43 per share for the quarter on revenues of $179.95 million.

During the quarter, ValueClick repurchased 2 million shares of common stock under the share repurchase program for a total cost of $52.1 million. The company's board of directors increased the remaining share repurchase authorization to $200 million.

VLCK closed Thursday's regular trading session at $25.10, up $0.66 or 2.70 percent on a volume of 2.37 million shares. In after-hours, the stock declined $3.90 or 15.54 percent to $21.20.