Tuesday after the bell, Internet infrastructure and indentity service provider VeriSign Inc. (VRSN) reported a profit for the fourth quarter, compared to a loss in the same quarter a year earlier. However, the company's quarterly earnings per share, excluding items, came in below analysts' expectations.
The Mountain View, California-based company reported GAAP net income for the fourth quarter of $92.0 million or $0.48 per share, compared to a GAAP net loss of $95.9 million or $0.50 per share for the year-ago quarter.
GAAP income from continuing operations for the fourth quarter was $63.6 million or $0.33 per share, compared to $35.3 million or $0.28 per share in the prior year quarter.
Excluding items, non-GAAP net income for the fourth quarter was $59.3 million or $0.31 per share, compared to $54.4 million or $0.28 per share in the fourth quarter of last year.
On average, 18 analysts polled by Thomson Reuters expected the company to earn $0.34 per share for the fourth quarter. Analysts' estimates typically exclude special items.
The company, which is the authoritative directory provider of various .com, .net, .cc, .tv, .name and .jobs domain names, said revenue for the fourth quarter rose 5.6% to $262.66 million from $248.76 million in the same quarter last year. Eighteen analysts had a consensus revenue estimate of $260.73 million for the fourth quarter.
Fourth quarter segment revenue for Internet Infrastructure and Identity Services, or the "core" businesses of Naming Services and Authentication Services, increased 5% from a year earlier to $262 million.
Naming Services revenue for the quarter rose 9% to $159 million, while Authentication Services revenue grew 1% to $103 million.
VeriSign Naming Services ended the quarter with about 96.7 million active domain names in the adjusted zone for .com and .net, representing a 7% increase year-over-year. VeriSign Business Authentication Services ended the quarter with 1.22 million SSL certificates in the installed base, an increase of 9% over the same quarter last year.
Total costs and expenses for the fourth quarter fell 29% to $180.1 million from $253.9 million in the fourth quarter of last year.
The company completed the divestiture of 14 non-core businesses, in addition to the sale of the remaining interest in the Jamba joint venture, raising proceeds in excess of $765 million.
In November, VeriSign closed the sale of MDG Services, a carve-out of the former Messaging business and the final non-core business to be divested. Earlier in the quarter, VeriSign also completed the sales of Global Security Consulting and Messaging and Mobile Media Services.
During the quarter, the company decided to wind down its Content Portal Services business. The Pre-Pay Billing and Payment Services business was fully wound down in October.
VeriSign repurchased about 9 million shares of its common stock during the fourth quarter for $208 million and ended the quarter with cash, cash equivalents and restricted cash of $1.48 billion, an increase of $688 million a year ago.
For the full year 2009, the company's GAAP net income was $245.6 million or $1.28 per share, compared to a GAAP net loss of $374.3 million or $1.87 per share for the full year 2008.
GAAP income from continuing operations for the full year 2009 was $201.2 million or $1.03 per share, compared to $69.3 million or $0.43 per share in 2008.
Non-GAAP net income for the full year 2009 was $246.8 million or $1.28 per share, compared to $200.8 million or $1.00 per share the prior year.
Revenue for the full year 2009 increased to $1.03 billion from $964.75 million in the full year 2008.
Analysts expected the company to earn $1.30 per share on revenue of $1.03 billion for the full year 2009.
"We had a good year in 2009 in which we delivered solid top line revenue growth while increasing the operating leverage in our core businesses and completing the divestitures of our non-core businesses," said Mark McLaughlin, president and chief executive officer of VeriSign. "I believe we're well positioned for 2010 and beyond."
VeriSign shares, which have traded in a range of $17.54 to $25.14 over the past year, closed Tuesday's regular trading session at $23.42, up 23 cents. The stock is currently losing $1.17 or 5.00% in after hours trading.
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