reported a net income of $53.8 million or 34 cents per share in the
fourth quarter of 2011 compared with a net income of $58.9 million
or 36 cents per diluted share in the third quarter of 2011 and a
net loss of $40.5 million or 23 cents per share in the previous
Excluding one-time items but including stock-based compensation
expense, net income came in at 35 cents per share, missing the
Zacks Consensus Estimate of 38 cents.
VeriSign reported revenue of $204 million in the fourth quarter
of 2011, up 3% sequentially and up 14% from the year-ago
In 2010, VeriSign sold the Authentication Services business to
) and closed down the operations of non-core Content Portal
The continuing operations of the company consist primarily of
the results of the Naming Services business, which comprises
Registry Services and Network Intelligence and Availability (NIA)
Services. NIA Services include the Managed Domain Name System
(Managed DNS), iDefense and Distributed Denial of Service (DDoS)
The base of registered names for .com and .net totaled 113.8
million active domain names, up from 112 million names at the end
of September and growing 8% year over year. The company added 7.9
million net new domain names in the quarter, up 4% year over
During the fourth quarter, Verisign completed the move of its
corporate headquarters to Reston, VA. In November 2011, VeriSign
entered into a new $200 million unsecured revolving credit facility
and borrowed $100 million under this facility to finance the
purchase of this building.
Operating margin came in at 45.6% compared with 37.7% in the
year-ago quarter and 50.1% in the third quarter of 2011.
VeriSign generated $124 million of cash from operating
activities and used $129 million in capital expenditures. The
company did not repurchase any share in the fourth quarter. In
2011, VeriSign repurchased shares worth $535 million and has $831
remaining under its current share repurchase authorization.
VeriSign ended the quarter with $1.31 billion of cash and
equivalents, up from $1.20 billion at the end of the prior quarter.
Deferred revenues came in at $729 million, an increase of $6
million from the prior quarter and $66 million from the year-ago
VeriSign earlier announced that the Internet Corporation for
Assigned Names and Numbers (ICANN) and Verisign have renewed
Verisign's contract to serve as the authoritative registry operator
for the .net registry for another six years till 2017.
The company also resolved its five-year long litigation
with Coalition for ICANN Transparency (CFIT). VeriSign recently
announced an increase in registry domain name fees for .com and
.net as per the agreement with ICANN.
Going forward, management now expects revenues between $865
million and $890 million in 2012, up 12% to 15% year over year.
Excluding one-time items and stock based compensation expense,
gross margin is projected around 80%. VeriSign expects to exit the
fourth quarter of 2012 with an operating margin of 52%-54%.
During 2011, VeriSign completed its restructuring plan, which
included divesting non-core businesses, the sale of authentication
services business and relocating the company's headquarters. Last
quarter, CEO Mark McLaughlin resigned as President andChief
Executive Officer effective August 1, 2011. Jim Bidzos, Verisign's
founder and previous CEO, became the President and Chief Executive
Officer effective August 1, 2011.
Verisign recently appointed John Calys as the Vice President and
Controller to the position of interim Chief Financial
Officer. Management stated that the search for a new CFO is on.
The results did not impress the investors much as shares gained
only 0.06% in after-market trading to close at $35.94. In regular
trading, shares lost 1.35% to close at $35.92.
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