VeriSign sales surge; forecast lags

Shares drop almost 13% in late trading

By John Shinal, MarketWatch

SAN FRANCISCO (MarketWatch) -- VeriSign Inc. said late Wednesday that quarterly profit almost doubled from a year ago as sales surged 74%, but the Internet services firm's shares fell sharply as its sales forecast lagged Wall Street expectations.

VeriSign slid $3.70, or almost 13%, to $25.30 in the after-hours session. The sell-off, which began when some investors were disappointed in the firm's second-quarter report, accelerated after company executives issued the third-quarter forecast on a conference call. The stock ended up less than 1% to $29 at Wednesday's bell.

After the close of trading, VeriSign (VRSN: news, chart, profile) said second-quarter net income rose 88% to $41.3 million, or 15 cents a share, from $21.9 million or 9 cents a share a year ago.

Excluding certain items, VeriSign reported earnings of 27 cents a share, just topping the average estimate of analysts surveyed by Thomson First Call.

Sales surged 74% to $445 million, also better than expected, as more businesses used VeriSign's service that secures online transactions.

But Chief Financial Officer Dana Evan forecast on the call that third-quarter sales would be in a range between $435 million and $440 million, less than the $460 million analysts expected. Evan forecast third-quarter earnings of 27 cents a share, in line with analysts' estimates.