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BOSTON (AFX) - Digital marketing company Digitas Inc. said Tuesday its second-quarter profit jumped 13 percent year-over-year, but the company lowered 2006 earnings estimates due to "specific client challenges," sending shares tumbling more than 15 percent in the after-hours session.
Net income totaled $13.5 million, or 14 cents per share, up from $11.9 million, or 12 cents per share, last year. Revenue for the quarter was $100.5 million, up nearly 15 percent from $87.6 million last year.
However, analysts polled by Thomson Financial expected the company to report, on average, higher earnings of 16 cents per share on $102.2 million in revenue.
Looking forward, the company expects to earn 7 cents to 10 cents per share in the third quarter on $93 million to $97 million in revenue. Excluding certain items, the company sees earnings of 10 cents to 13 cents per share -- well below current analyst estimates of 17 cents.
For the full year, the company said it now expects to earn 41 cents to 49 cents per share on $380 million to $395 million in revenue. On an adjusted basis -- or excluding certain expenses -- the company cut its full-year earnings projection to a range of 54 cents to 62 cents per share, down from a prior forecast of 61 cents to 71 cents per share.
Analysts, who typically don't include charges in estimates, expect the company to report 68 cents per share on $415.5 million in revenue for the year.
"While I am disappointed in our reduced near-term outlook, due to a handful of specific client challenges, our largest and longest-standing client relationships remain strong. In addition, we have a more diverse set of clients with the potential to grow over the long-term," said Chairman and CEO David Kenny.
Shares of Digitas closed at $10.23 on the Nasdaq, and then fell $1.61, or nearly 16 percent, to $8.62 in after-hours trading on the INET electronic exchange. Copyright 2006 Associated Press. All rights reserved. This material may not be
Copyright 2006 AFX News Limited. All Rights Reserved.