Demand Media Inc. (DMD) reported that its fourth-quarter net income was $4.75 million or $0.05 per share, compared to a loss $6.43 million or $0.08 per share in the same quarter last year.
Adjusted earnings for the quarter rose to $0.12 per share from $0.08 per share in the year ago quarter. Analysts polled by Thomson Reuters expected the company to report earnings of $0.11 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter rose to $103.14 million from $84.42 million in the prior year quarter. Total Revenue ex-TAC for the quarter increased to $96.8 million from $81.3 million last year. Eleven analysts had consensus revenue estimate of $96.70 million for the quarter. Revenue ex-TAC was defined by the Company as GAAP revenue less traffic acquisition costs or TAC.
For the first-quarter, the company expects adjusted earnings per share to be in the range of $0.07 - $0.08 per share, revenue in the range of $100.0 million - $102.0 million, and Revenue ex-TAC in the range of $94.0 million - $96.0 million. Analysts expect the company to report earnings of $0.10 per share on revenues of $95.91 million for the first-quarter.
Looking ahead for fiscal 2013, the company anticipates adjusted earnings per share to be in the range of $0.39 - $0.43 per share, revenue of $435.0 million - $443.0 million, and revenue ex-TAC in the of $410.0 million - $418.0 million. Analysts expect the company to report earnings of $0.46 per share on revenues of $413.84 million for fiscal 2013.
The company said that guidance, for the first quarter ending March 31, 2013 and fiscal year ending December 31, 2013, excludes $5 million to $10 million of estimated expenses in 2013 associated with the formation of the Company's gTLD initiative.
In a separate press release, Demand Media announced that its board has authorized a plan to explore separating its business into two independent, publicly-traded companies: A pure-play media company with a outsourced content creation platform that organically grows its audience, leading web properties that reach over 100 million monthly unique visitors, and an integrated monetization platform that incorporates branded, network and mobile revenue streams; and A pure-play domain services company that would be the only end-to-end provider offering registry services, expansive wholesale and retail distribution, and comprehensive aftermarket services.
The company expects that the completion of this transaction could take place in the next nine to twelve months.
This transaction is subject to a number of conditions, including final approval of the transaction by Demand Media's board, favorable tax rulings and opinions regarding the tax-free nature of the transaction to Demand Media and to its stockholders, further due diligence as appropriate, and the effectiveness of required filings with the Securities and Exchange Commission.
DMD closed Tuesday at $7.84, down $0.07 or 0.88%. However, the stock is currently gaining $1.16 cents or 14.80% in after hours trading.
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