24/7 Sells Off

The red-hot online-ad stock suffers a setback despite in-line numbers.
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Shares of

24/7 Real Media

(TFSM)

sold off late Wednesday after the online advertising company failed to wow Wall Street with its first-quarter earnings and 2006 guidance.

Pro forma operating income more than doubled to $3.6 million, or 7 cents per share, from $1.3 million, or 3 cents, a year earlier, the New York-based company said in a statement. Sales jumped 48% to $42.9 million. The results beat expectations of profit of 6 cents on sales of $41 million. 24/7 had a net loss of $7.5 million, or 16 cents, compared with $400,000, or 1 cent a share, a year earlier. Results were hurt by the expensing of stock options.

The company expects to make 8 cents a share for the second quarter on revenue of between $46 million and $47 million. Analysts were looking for an 8-cent profit on $46.3 million in sales.

The company projected a full-year profit of 35 cents or 36 cents a share on sales of $190 million to $200 million. Analysts had expected a 34-cent profit on revenue of $192.4 million.

Shares of the New York-based company, which have jumped 48% this year, fell 54 cents, or 5%, to $10.35 in after-hours trading.

"If you look at the analysts' view on us, they love everything about this business," CEO David Moore said in an interview. "In some cases, they are feeling that we are trading at the top of the valuation."