Digital River posts better-than-expected 2nd-quarter earnings and revenue, but outlook weak

Digital River 2Q profit falls but beats estimates

MINNEAPOLIS — E-commerce software provider Digital River Inc. on Wednesday reported better-than-expected adjusted profit and sales for the second quarter, but forecast third-quarter profit below analyst estimates, sending shares tumbling in aftermarket trading.

The company said it earned $11.8 million, or 31 cents per share, down from $13.2 million, or 33 cents per share, in the same quarter last year. Excluding certain one-time items, adjusted profit totaled 42 cents per share in the latest period.

Revenue slipped about 2 percent to $96.6 million.

Analysts polled by Thomson Reuters had expected the company to earn 41 cents per share on revenue of $96.5 million. Analyst expectations typically exclude one-time items.

“Our second-quarter revenue was squarely in line with our expectations,” said Joel Ronning, Digital River’s CEO, in statement. “Even though our year-over-year results continue to be tempered by the slow economy, we remain encouraged by the growth in our sales pipeline, our new product roadmap, and our recent wins in the business-to-business software market. We are maintaining an outlook of cautious optimism for 2009.”

Looking forward, the company said it expects to earn 26 cents to 29 cents per share for the third quarter on revenue of $96.5 million to $98.5 million. Adjusted earnings are expected to range between 38 cents to 41 cents per share.

Analysts, on average, expect the company to earn higher profit of 45 cents per share on revenue of $97.8 million.

Shares fell $2.49, or 6.2 percent, to $37.50 in after-hours electronic trading, having closed earlier down 52 cents at $39.99.