Updated from 8:49 a.m. ESTLookSmart ( LOOK) shares surged more than 10% Thursday after the Internet search operator raised first-quarter guidance. LookSmart now expects revenue to be $21 million to $23 million, up from its previous forecast of $16 million to $18 million. That's well above analysts' consensus estimate of about $17 million. The provider of Internet search solutions expects its GAAP first-quarter loss to narrow to $10 million to $12 million, including restructuring charges totaling $4 million to $5 million. Previously, the company forecast a loss of $12 million to $14 million, including restructuring charges of about $5 million to $6 million. LookSmart's GAAP net income for the fourth quarter was $1.6 million, or a penny a share, vs. a consensus forecast of 2 cents a share. Analysts are expecting the company to post a loss of 10 cents a share in the first quarter. Recently, shares were up 20 cents, or 11.5%, to $1.94.
Shares in LookSmart and other Internet search companies rallied last week after Ask Jeeves ( ASKJ) said first-quarter earnings and revenue would be higher than forecast. "LookSmart's improved financial outlook reflects solid growth in its core LookListings business and continued progress in reducing the company's overall cost structure," the company said in a statement. "Positive business trends include the rapid signing and implementation of new distribution partners to its Sponsored Search network and success in meeting customer needs by providing high performance search traffic at a reasonable cost as compared to larger search networks, which can be prohibitively high for marketers." The company also said it recently signed an agreement with Microsoft ( MSFT) to continue providing search results to its MSN site. LookSmart said it will provide its forecast for the second-quarter and update full-year guidance when it announces first-quarter earnings April 29.