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Digital River Plunges on 2006 Forecast

The stock drops 15%.
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Digital River

(DRIV) - Get Global X Autonomous & Electric Vehicles ETF Report

plunged 15% late Wednesday after the e-commerce outsourcing outfit slashed 2006 earnings guidance.

The Minneapolis-based company made $12.4 million, or 31 cents a share, up from the year-ago $8.1 million, or 22 cents a share. On a pro forma basis, excluding certain costs, earnings rose 72% from a year ago to 50 cents a share, 2 cents ahead of the Thomson First Call analyst estimate. Revenue also beat the Thomson estimate, rising to $53 million from $39 million a year earlier.

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"In the third quarter, we again exceeded our revenue and earnings expectations," said CEO Joel Ronning. "Our business continues to scale and our strategic growth initiatives are paying off. Revenue generated through international markets, strategic marketing services and our oneNetwork online sales channel contributed to our solid third-quarter performance."

Fourth-quarter guidance, calling for a 51-cent pro forma profit on sales of $57 million, was in line with expectations. But for 2006, Digital River called for a $1.44-a-share pro forma profit on revenue of $250 million. Analysts were looking for $2.39 a share on $260 million.

Late Wednesday, Digital River shares slid $5.42 to $32.