Earnings: ValueClick Q1 Profits Gain 3.2 Percent, Revs Up 12 Percent

This story was written by David Kaplan.
Online ad firm ValueClick (NSDQ: VCLK) posted modestly higher Q1 net income of $19.2 million, or $0.19 per diluted common share, a 3.2 percent gain over last year's $18.6 million, or $0.18 per diluted common share. The company said that its net income came in ahead of previously issued guidance. Q1 revenue was $176 million, an increase of $19.1 million, or 12 percent, from Q107's $156.9 million . The company's positive numbers were boosted by activity associated with comparison shopping engine MeziMedia, which it acquired in July 2007. The Q1 numbers could represent something of a comeback for ValueClick, which settled a suit brought by the Federal Trade Commission over deceptive marketing tied to lead generation practices. The company ended up paying $2.9 million to the FTC in February in hopes of putting the issue behind it.

Earnings release | Webcast (4:30 PM EDT)

-- Update: [In progress] ValueClick CEO Tom Vadnais said that although pleased with Q1 results, the company will not increase its guidance for Q2, due mostly economic uncertainty. He also sought to convey a broader profile of the Westlake Village, CA. company as more than an "ad network" or "lead gen operator," citing its display ad, affiliate marketing, comparison shopping and search offerings.

-- Repurchase program: CFO John Pitstick provided an update on ValueClick's stock repurchase program. In the first quarter of 2008, the Company repurchased 2.3 million shares of its outstanding common stock for $39.3 million. Year-to-date, ValueClick has repurchased approximately 3.2 million shares for $54.7 million.

-- Forecast: Pitstick: Revenues for Q2 are expected to range from $166- to 170 million. For the full year, the company forecast $730- to $740 million in revenues.

-- Lead Gen prospects: During the Q&A Vadnais was asked about the company's lead gen business. He said he saw a decline in lead gen business starting in Q2, starting with the FTC investigation. "We took an approach of it being flat and it has been down from Q4, though we may be seeing signs it may be picking up again. But we do not expect to see it return to its heights any time soon."

-- Ad nets: COO Dave Yovanno said that ValueClick is developing a vertical ad network strategy for later this year, which the company views as a complement its remnant ad net business. "It's a natural growth strategy over the next few years, though it doesn't have the volume and scalability of the horizontal ad network business."

By David Kaplan