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Earnings strong at Ask Jeeves, company raises guidance

Ask Jeeves Inc. on Tuesday posted earnings that topped Wall Street expectations and raised its guidance on its stock.

The company raised its quarterly and full-year forecasts, citing increased Internet traffic and a rise in Web-search ad revenue.

Ask Jeeves (ASKJ) shares gained almost 4 percent in extended trade after the company boosted its outlook on the heels of first-quarter results that handily beat Wall Street's profit and revenue forecasts.

Emeryville, California-based Ask Jeeves had a profit from continuing operations of $13.4 million, or 23 cents per diluted share, compared with its year-earlier income from continuing operations of $8.5 million, or 17 cents per diluted share. The year-earlier results included an acquisition-related gain of 10 cents per share.

Revenue was up almost 73 percent, to $39.2 million from $22.7 million last year. The company's advertising partnership with Google Inc., the No. 1 Web search provider, contributed 69 percent of overall revenue.

Analysts had expected Ask Jeeves to post a profit in the range of 16 cents to 19 cents a share on revenue of $35 million to $37.5 million, according to Reuters Research, a unit of Reuters Group Plc.

Ask Jeeves Chief Executive Steve Berkowitz told Reuters in a telephone interview that the company's growth had been fueled mainly by recent improvements to its Teoma search technology, coupled with existing Smart Search features that focus on such things as products, pictures and news.

With just 3 percent of the overall Web search market, Ask Jeeves is dwarfed by industry giants Google and Yahoo Inc. (YHOO.O: Quote, Profile, Research) Nevertheless, it owns its own search engine and is seen by market experts as a strong alternative to the larger players.

"When we look at our technology, not only is it getting better, but it's different," said Berkowitz, who added that the company also is working to deliver more targeted ads.

"Advertisers are going to come where the users are," he said.

Ask Jeeves expects to close its cash and stock purchase of Interactive Search Holdings in mid-May, a move that is expected to nearly double its Web search market share.

ISH owns Web search sites iWon, Excite and others, which should help Ask Jeeves reach more users while providing a platform for delivering more personalized search results, executives said.

Excluding ISH, Ask Jeeves now sees second-quarter revenue of $38 million. It expects per-share earnings, excluding amortization, of 17 cents and net earnings of 16 cents.

Including ISH, the company expects quarterly revenue of $55 million and per-share earnings, excluding amortization, of 21 cents and net income of 15 cents.

For 2004, Ask Jeeves now sees revenue of about $255 million and earnings, excluding amortization, of $1.00 per share. It sees net income of 75 cents a share.

"The second quarter was a little conservative," said Fulcrum Global Partners analyst Imran Khan, who added that Ask Jeeves' 2004 outlook was in line with his own numbers.

Ask Jeeves shares rose to $38.49 in extended trade, after falling 6 percent to $36.90 on the Nasdaq ahead of the earnings report.

The stock has more than doubled since the start of the year.

Source: Ask Jeeves

Posted by nakul at April 27, 2004 09:25 AM | TrackBack