United Online


sank Monday after posting a third-quarter profit and agreeing to pay $100 million in cash for Classmates Online.

For its third quarter ended Sept. 30, the Woodland Hills, Calif., Internet service provider earned $21.6 million, or 19 cents a share. That's up from the year-ago $8.9 million, or 13 cents a share. Revenue rose to $111 million from $89 million a year earlier.

On an adjusted basis, excluding certain costs, latest-quarter earnings were 26 cents a share, up from the year-ago 16 cents and a penny ahead of analyst estimates.

United Online said operating income rose 49% from a year ago, while pay subscribers rose by 43,000, to 3.2 million. Revenue-generating units increased by 123,000 to 4.4 million.

"United Online's results this quarter demonstrate our fiscal discipline and the strength of the company's business model," said CEO Mark Goldston. "Once again, the company delivered record adjusted OIBDA and strong free cash flow. We intend to continue expanding our product offerings and broadening our distribution channels as we seek to strengthen our position as a leading provider of consumer Internet subscription services."

United Online also said it would buy Classmates Online, which the company said has 1.4 million pay subscribers, 10.3 million monthly active accounts and more than 38 million registered members. United Online intends to maintain Classmates' operations in Renton, Wash.

Early Monday, United Online slipped 50 cents to $9.45.