ValueClick shares drop on 4Q sales outlook

SAN FRANCISCO (AP) — ValueClick Inc.'s shares fell Wednesday after the online advertising company issued lower-than-expected fourth-quarter revenue guidance.

On Tuesday, the Westlake Village, Calif.-based company said its third-quarter profit jumped as it cut costs, helping it overcome a 12 percent drop in revenue. But ValueClick predicted $128 million to $138 million in fourth-quarter revenue, which is lower than the $142 million analysts polled by Thomson Reuters are expecting.

Analysts' average estimate has since been lowered to $137 million for the last three months of the year.

In a note to clients, Needham&Co. analyst Mark May downgraded ValueClick to "Hold" from "Buy," calling its guidance "disappointing." He noted that outlook stemmed partly from ValueClick's expectation that revenue in its comparison shopping and search business will decline.

He believes revenue and earnings growth could be flat in the near term due to issues like ongoing weakness in ValueClick's lead generation business and a generally difficult advertising environment that may become increasing competitive in the area of online display ads.

ValueClick shares fell $2.33, or 18.7 percent, to finish trading at $10.16.