Neustar Q1 Results Miss Estimates, But Backs 2014 Outlook

(RTTNews) - Technology and directory services provider Neustar, Inc. (NSR) reported Wednesday a profit for the first quarter that declined six percent from last year, despite revenue growth, hurt by higher expenses. Both adjusted earnings per share and quarterly revenues missed analysts' expectations. The company also reaffirmed its earnings and revenue guidance for the full-year 2014.

"Our first quarter results demonstrate that we are delivering on our strategic initiative to become a leader in information services and analytics. Our targeted investments are paying off and we are seeing strong and growing market demand for our IS&A offerings," President and CEO Lisa Hook said in a statement.

The Sterling, Virginia-based provider of real-time information services and analytics, reported net income of $31.68 million for the first quarter, down 6 percent from last year's $33.76 million, while earnings per share remained flat with last year at $0.50.

Excluding items, adjusted net income for the quarter was $52.41 million or $0.84 per share, compared to $54.13 million or $0.80 per share in the year-ago quarter.

On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.88 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter increased 6 percent to $229.90 million from $216.42 million in the same quarter last year, but missed nine Wall Street analysts' consensus estimate of $230.12 million by a whisker.

Revenue from marketing services increased 21 percent to $32.9 million, driven by higher demand for workflow solutions. Security services revenue improved 11 percent to $30.1 million, driven by increased demand for DDoS protection services.

NPAC services revenue grew 6 percent to $118.8 million, reflecting an increase in the fixed fee established under contracts to provide local number portability services. Meanwhile, data services revenue declined 5 percent to $48.1 million, due to lower revenue in caller identification services.

Operating expense for the quarter increased 20 percent to $174.6 million from last year.

Looking ahead to fiscal 2014, the company said it continues to expect adjusted earnings in the range of $3.64 to $3.80 per share, on projected revenues between $945 million and $970 million.

Street is currently looking for full-year 2014 earnings of $3.77 per share, on annual revenues of $957.11 million.

CFO Paul Lalljie added, "We closed on the acquisition of .CO earlier this week, bolstering our position as a key player in the expanding gTLD market. We remain confident in our full-year forecast driven by our first quarter results and leading indicators, and as a result we are affirming our guidance for the year."

NSR closed Wednesday's regular trading session at $27.79, down $052 or 1.84% on a volume of 0.35 million shares. The stock lost a further $0.99 or 3.56% in after-hours trading.