VeriSign Profit in Line, Shares Slide After Hours

Updated from 5:17 p.m. EDT

VeriSign ( VRSN) returned to second-quarter profitability after a year-ago loss, but sales slipped by 3.6%, the company said after the closing bell on Thursday.

In recent after-hours trading, shares were off 77 cents, or 4.28%, to $17.20; the Mountain View, Calif., company gained 47 cents, or 2.7%, to $17.97 in the regular trading day.

Revenue in the second quarter was $256 million, down from $265.3 million a year ago, but better than the $238.9 million projected by analysts. Sales included $13 million in revenue from Jamba, a content provider acquired by VeriSign earlier this year.

However, last year's results included $59 million earned by Network Solutions, which the company subsequently sold and contributed nothing to revenue in the just completed quarter. Without Network Solutions, VeriSign would have posted sales of $206 million in the second quarter of last year.

Backing out sales from both Jamba and Network Solutions, the company's revenue grew by 18% year over year, and 6% sequentially, said Verisign CFO Dana Evan.

According to generally accepted accounting principles, the company earned a profit of $22 million, or 9 cents per fully diluted share in the just completed quarter. A year ago, the company lost $142 million, or 60 cents a share.

Excluding items, the company earned $55 million, or 15 cents a fully diluted share, in line with the estimates of analysts polled by Thomson First Call.

VeriSign sells authentication tools and services for Web sites.

The company expects to earn a pro forma profit of 16 cents a share in the third quarter, on sales of $285 million, including $35 million from Jamba. Analysts were expecting guidance of $253.9 million.

In the fourth quarter, Evan said, the company will likely earn 17 cents a share, on sales of $300 million, including $40 million from Jamba. Analysts were expecting sales of $267.5 million.

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