VeriSign Posts Profit

VeriSign Inc. on Wednesday reported a quarterly profit versus a year-earlier loss, driven by an investment gain and strong demand for its authentication tools and services for the Internet and telecommunications networks.

Despite posting results that exceeded Wall Street forecasts, shares fell 11% in after-hours trading.

The Mountain View, Calif.-based company posted fourth-quarter net income of $114.8 million, or 43 cents a share, including a one-time gain from the sale of some of its VeriSign Japan stock. A year earlier, it recorded a net loss of $32.3 million, or 13 cents, after it took a large restructuring charge.

Excluding restructuring and acquisition-related charges, the gain from the VeriSign Japan stock sale and other items, VeriSign’s profit in the quarter would have been 21 cents a share.

Revenue jumped 41.5% to $356 million from $251.6 million.

Analysts, on average, expected revenue of $350.1 million and earnings before items of 20 cents a share, according to Reuters Estimates.

VeriSign shares closed up $1.99 to $29.28 in regular Nasdaq trading but retreated to $26.15 in after-hours trading.

The company forecast first-quarter revenue of $370 million and earnings of 21 cents a share, matching Wall Street’s consensus estimate for earnings, excluding items.

It raised revenue guidance for 2005 to $1.50 billion to $1.55 billion from $1.43 billion previously. VeriSign said it expected earnings of 90 cents a share for the year.

Analysts polled by Reuters Estimates had expected revenue of $1.50 billion and earnings of 90 cents, excluding items.