) reported a net income of $68.0 million or $0.42 per share in the
first quarter of 2012 compared to net income of $40.3 million or
$0.24 per share in the year-ago quarter and net income of $53.8
million or $0.34 per share in the fourth quarter of 2011.
Excluding one-time items but including stock-based compensation
expenses, net income came in at $0.37 cents per share, missing the
Zacks Consensus Estimate of $0.39.
In 2010, VeriSign sold the Authentication Services business and
closed down the operations of non-core Content Portal Services
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)
VeriSign reported revenue of $206 million in the first quarter
of 2012, up 13% from the year-ago quarter and up 1%
Internet adoption, e-commerce and online advertising continued
to be drivers of our Registry business growth.
The base of registered names for .com and .net totalled 116.7
million active domain names, up from 113.8 million names at the end
of December quarter and growing 8.1% year over year. The company
added 2.86 million net new domain names in the quarter, up 4% year
over year. The company also processed a record 8.9 million new
domain name registrations, an increase of 7.7% year over year.
Operating margin came in at 48.1%, compared to 45.6% in the
previous quarter and 36.1% in the fourth quarter of 2011.
VeriSign generated $110 million of cash from operating
activities and used $13 million in capital expenditures. The
company repurchased 1.8 million shares for $68 million.
VeriSign still has $763 remaining under its current share
VeriSign ended the quarter with $1.35 billion of cash and
equivalents, up from $1.31 billion at the end of the prior quarter.
Deferred revenues came in at $783 million, an increase of $55
million from the previous quarter.
At the end of March 2012, the Internet Corporation for Assigned
Names and Numbers (ICANN) posted renewal terms negotiated between
Verisign and ICANN for the .com Registry Agreement.
The terms of the agreement remains pretty much the same as the
existing agreement except for new provisions regarding
indemnification and audit rights, which is consistent with the
other five largest generic top level domain (gTLD) registry
agreements (including the .net agreement).
Verisign applied for 14 new gTLDs including 12 transliterations
of .com and .net through ICANN's new gTLD application process. This
is expected to close in May 2012. Additionally, applicants for
approximately 220 new gTLDs selected Verisign to provide back-end
However, revenue from new gTLDs is not expected before 2013 and
is not expected to be material in 2013.
Meanwhile, VeriSign's search for a new CFO ends as the company
named George E. Kilguss, III as CFO effective May 14. George brings
over 25 years of solid financial experience to VeriSign.
Going forward, management now expects revenues between $870
million and $890 million in 2012, up 12% to 15% year over year and
up from the previous guidance of $865 million - $890 million in
2012. 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
The disappointing results did not impress the investors as
shares lost 3.59% in after-market trading to close at $40.52. In
regular trading, shares gained 0.67% to close at $42.03.
VERISIGN INC (
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