Thursday, Internet infrastructure service provider VeriSign Inc. (VRSN), reported a swing to profit for the second quarter, helped by strong revenue growth from its core businesses. Earnings, however, missed analysts' estimate by a cent, while revenues results exceeded expectations. Separately, the company announced the appointment of Mark McLaughlin as its chief executive officer and Brian Robins chief financial officer.
The Mountain View, California-based company reported second quarter net income attributable to the common stockholders of $ 34.87 million or $0.18 per share, compared to a loss of $69.18 million or $0.35 per share in the year-ago quarter.
Income from continuing operations for the quarter was $44.30 million or $0.23 per share, compared to a loss from continuing operations of $13.03 million or $0.07 per share in the same quarter last year.
Loss from discontinued operations for the quarter narrowed to $8.53 million or $0.04 per share, compared to a loss from discontinued operations of $55.16 million or $0.28 per share last year.
Excluding items, net income for its core businesses for the quarter was $61 million or $0.31 per share for the quarter.
On average, eighteen analysts polled by Thomson Reuters expected the company to earn $0.32 per share for the quarter. Analysts' estimates typically excludes special items.
In the previous first quarter, VeriSign reported a net income of $65.02 million or $0.34 per share, compared to a net loss of $8.10 million or $0.04 per share last year. Excluding items, net income for its core businesses was $61 million or $0.32 per share for the quarter.
Revenues for the quarter increased to $256.62 million from $242.03 million in the prior-year quarter. Seventeen analysts had a revenue consensus of $255.16 million for the second quarter.
On a GAAP basis, VeriSign reported segment revenue for Internet Infrastructure and Identity Services, or the core businesses of Naming Services and Authentication Services, of $255 million, up 9% from $234.45 million year-over-year.
VeriSign's core business,Internet Infrastructure and Identity Services, consists of Naming Services, and Authentication Services comprising of Business Authentication and User Authentication.
Revenue from discontinued operations was $70 million while non-core businesses reported $1.4 million of revenue as part of continuing operations during the second quarter of 2009.
Commenting on the results, VeriSign's executive chairman and chief executive officer on an interim basis, Jim Bidzos said, "Under economic conditions that continue to make our environment a challenging one, we have delivered another successful quarter while, at the same time, refocusing the company. We continue to make progress with our divestiture program, with only two of thirteen businesses left to divest."
VeriSign Naming Services ended the quarter with about 93.5 million active domain names in the adjusted zone for .com and .net, representing a 7% increase year-over-year.
VeriSign Business Authentication Services, previously known as SSL Certificate Services, ended the quarter with 1.17 million SSL certificates in the installed base, an increase of 11% over the same quarter last year.
Subsequent to the end of the quarter, VeriSign completed the sale of the Managed Security Services business. The proceeds from the sales of the non-core businesses from November 2007 to date, including the sale of the remaining interest in the Jamba joint venture, are around $575 million.
For the six-month period, the company's net income totaled $99.89 million or $0.52 per share, compared to a loss of $77.24 million or $0.37 per share in the same period last year.
Revenues for the first half of fiscal 2009 rose to $511.61 million from $477.30 million in the similar quarter of 2008.
Separately, VeriSign announced the appointment of Mark McLaughlin as its chief executive officer effective August 17. McLaughlin will also join VeriSign's board immediately. McLaughlin would retain his title of president in addition to his new roles.
McLaughlin, 43, served as president and chief operating officer of VeriSign since January 2009. Prior to that, he held a number of important roles at VeriSign, including executive vice president and general manager of information services and vice president of corporate business development.
VeriSign also appointed Brian Robins as its executive vice president and chief financial officer effective immediately. Robins served as acting chief financial officer since April 2008 and will oversee corporate finance, accounting, financial planning and analysis, treasury and investor relations. Robins had served as senior vice president, finance, at VeriSign since August 2007.
The company also announced that its founder Jim Bidzos will continue to serve as executive chairman on a permanent basis as of August 17.
VRSN closed Thursday's trading at $20.56, down $0.02 or 0.10%, on a volume of 4.38 million shares on the Nasdaq. In the past 52 weeks, the stock trended in a broad range of $16.23 - $34.00, with a three-month average volume of 5.03 million shares.
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