Rocket Fuel Loss Widens, Shares Plummet On Weak Q2 Outlook

(RTTNews) - Digital advertising company Rocket Fuel Inc. (FUEL), Thursday reported a loss for the first quarter that widened from a year ago, hurt by higher expenses despite a surge in revenues. Moving ahead, the company detailed a weak revenue outlook for the second quarter, sending its shares plunging 26 percent in after hours.

California-based Rocket Fuel's first-quarter loss widened to $11.2 million or $0.33 per share from $8.1 million or $0.97 per share last year. Loss, on a per share basis, narrowed due to higher number of shares.

Adjusted loss for the quarter was $6.3 million or $0.18 per share. On average, eight analysts polled by Thomson Reuters expected a loss per share of $0.30 for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter increased to $74.4 million from $38.2 million last year. Analysts had a consensus revenue estimate of $76.21 million for the quarter.

Gross margin improved to 49.5 percent from 45.9 percent last year.

Total operating expenses increased to $47.3 million from $23.8 million last year.

Moving ahead, the company expects second-quarter revenue in the range of $88.0 million to $92.0 million. Analysts currently expect revenues of $101.83 million for the second quarter.

Rocket Fuel reiterated its full-year 2014 revenue outlook of $420.0 million to $435.0 million. Analysts currently expect full-year 2014 revenues of $432.82 million.

"We are reiterating our 2014 guidance as we expect revenue growth in the latter half of the year to increase slightly from our expected Q2 growth rate due to a number of factors, including the impact of recent sales hiring and expanded offerings that enhance our current product suite," said CFO Peter Bardwick.

FUEL closed Thursday's trading at $27.81, up $0.96 or 3.58%, on the Nasdaq. The stock dropped $7.32 or 26.32%, in after-hours trade.