VeriSign Gets Jolt From Jamba!

The company beats analyst estimates for earnings and revenue with help from its mobile Internet portal buy.
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Updated from 4:56 p.m. EDT

VeriSign

(VRSN) - Get Report

, which said last month it expects stronger-than-expected sales thanks to its Jamba! acquisition, swung to a third-quarter profit Wednesday to beat analyst estimates for both earnings and revenue.

The company also raised its fourth-quarter guidance and offered its 2005 outlook for the first time, saying results during both periods should surpass current expectations.

Shares of VeriSign rose $1.73, or 7.9%, to $23.73 in recent after-hours trading; shares closed down 16 cents, or 0.7%, at $22.

Under generally accepted accounting principles, Mountain View, Calif.-based VeriSign reported net income of $40.4 million, or 16 cents a share, in the third quarter. That compared with net income of a net loss of $31.3 million, or 13 cents a share, in the same period a year earlier.

Excluding charges, the company said it earned pro forma net income of 19 cents a share in the third quarter, compared with 15 cents a share a year earlier. Revenue rose 21.3% to $325.3 million from $268.1 million a year earlier.

Wall Street analysts expected VeriSign to earn pro forma net income of 16 cents a share on $290.8 million in revenue in the third quarter, according to Thomson First Call.

VeriSign, which provides infrastructure services for the Internet and telecommunications industry, said in a regulatory filing in September that recently acquired mobile Internet

portal Jamba! was performing ahead of expectations and would help the company post revenue ahead of its targets for earnings of 16 cents a share and revenue of $285 million, with $35 million from Jamba!

On a postclose call, VeriSign management raised the company's fourth-quarter outlook, forecasting that revenue would total $345 million and that non-GAAP earnings would come in at 20 cents a share. That's higher than analyst estimates calling for revenue of $307.5 million and earnings of 18 cents a share in the fourth quarter.

Looking forward to 2005, VeriSign said revenue should range from $1.4 billion to $1.425 billion, with non-GAAP earnings ranging from 84 cents to 85 cents a share. That's considerably higher than analyst revenue estimates, which average $1.323 billion and top out at $1.394 billion. It's also higher than the consensus estimate for 2005 earnings, which sits at 81 cents a share.