Digital River Blows Out Numbers

Digital River's(DRIV) fourth-quarter earnings rose 33% from a year ago, helped by a tax-related gain. Adjusted earnings were well ahead of estimates and the technology outsourcer raised guidance for the full year.

Digital River earned $17.7 million, or 44 cents a share, in the quarter, compared with $12.8 million, or 33 cents a share, last year. Adjusted to exclude one-time items, earnings of $14.8 million, or 35 cents a share, were 4 cents ahead of the Thomson First Call consensus estimate.

Fourth-quarter sales rose 28% from a year ago to $61.6 million, beating the $57.15 million consensus estimate.

For the first quarter ending in March, Digital River expects to earn 40 cents a share before items on revenue of $70 million. Analysts were expecting 37 cents a share on revenue of $62.6 million. For the year ending next December, Digital River expects to earn $1.53 a share before items on sales of $280 million. Analysts were expecting $1.43 a share on sales of $250 million.

"We ended 2005 with record financial results, exceeding revenue and earnings expectations," the company said. "Last year was a year of expansion at Digital River. We expanded our geographic footprint, strategic marketing programs and oneNetwork marketplace. We also moved into new vertical segments, including the high tech and consumer electronics markets and the enterprise license management space. As we look out into 2006, we believe we have set a solid stage for our future growth and plan to accelerate our investments in each of these areas to take advantage of the growth opportunities before us."

The stock closed Wednesday at $33.08, down 20 cents on the session. In after-hours trading, it jumped $2.79, or 8%, to $36.16.

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