United Online Reports Lower Profits

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Internet provider United Online Inc. late Tuesday reported net income fell 15 percent to $13.7 million on lower Internet service revenues and increased expenses related to the online provider’s scrapped stock offering of a social networking subsidiary.

The Woodland Hills-based parent of NetZero and Juno Internet reported net income of $13.7 million, or 19 cents a share. Analysts polled by Thomson Financial’s First Call had expected 28 cents per share for the quarter ended June 30.

Chief Executive Mark Goldston said the company expensed nearly $4 million in costs related to the proposed stock offering of its Classmates Media subsidiary, which was withdrawn in December. The company now hopes to go to market next year.

Operations income from its Internet access service segment fell 22 percent to $21,131. For the third quarter, the company expects revenues to range from $117 million to $121 million, with operating income of $34 million to $38 million.

Separately, Proxy Governance Inc. recommended on Tuesday that FTD Group Inc shareholders vote against United Online’s proposed takeover of the company for $434 million in cash and stock. The investor advisory firm said the transaction undervalues the floral services retailer and expressed concern about a possible lack of safeguards for shareholders in the deal.

United Online shares closed up 2 cents, or less than 1 percent, to $11.16 in Nasdaq trading on Wednesday.

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