NSI earnings trump the Street
The company that assigns Internet addresses reports record net revenues from surging registrations of domain names, helping it beat Wall Street expectations.
NSI posted net revenues of $31.3 million for the fourth quarter ended December 31, 1998, a 117-percent rise over year-ago results. Net income increased to $3.7 million, or 22 cents per share, on a diluted basis. A consensus of analysts had expected the company to earn 20 cents per share, according to First Call. NSI earned 11 cents per share for the same year-ago period.
The company, founded in 1979, pioneered the development of registering Web addresses ending in ".com," ".net," ".org," and ".edu." The company also provides enterprise network services that focus on assisting large commercial organizations in the evolution and management of their enterprise networks.
NSI said it registered a record 621,000 net new Internet domain names in the fourth quarter, up 137 percent from the fourth quarter 1997 total of 262,000 names. In the fourth quarter of 1998, the number of net new international registrations in .com, .net, and .org totaled 168,000, up 91 percent from the fourth quarter 1997 total of 88,000.
"Network Solutions' revenue more than doubled in 1998 as we registered more than 1.9 million net new domain names," said Michael A. Daniels, chairman and acting chief executive officer of Network Solutions. "The growth helped us increase our entire registration base by 118 percent in 1998, bringing total registrations of 1.5 million domain names at the end of 1997 to a new high of nearly 3.4 million domain names at the close of 1998."
In December, NSI signed agreements with Web portals Yahoo and Netscape aimed at expanding its brand awareness and promoting Web address registrations to the global Internet community.
Shares of NSI closed at 148 yesterday, and have traded as high as 260.38 and low as 17.5 during the past 52 weeks. The stock retreated somewhat in afternoon trade today, shedding just over 4 percent, but it later rebounded to end the day at 153.875, up 5.875 or 3.97 percent.
Network Solutions' consulting services reported revenues of $3.3 million in the fourth quarter, up 47 percent from third quarter 1998 revenues. Since 1998, consulting services has expanded its operations with new offices in Atlanta, Los Angeles, and New York to increase local support for clients of its Internet and enterprise network services, NSI said.
For the year ended December 31, 1998, net revenues were $93.7 million, an increase of 107 percent over net revenues of $45.3 million for the comparable 1997 period. Net income increased to $11.2 million or 67 cents per share on a diluted basis. The company had net income of $4.2 million or 31 cents per share for the year ended December 31, 1997.