Looking to leave a challenging 2006 behind, CNET Networks (Nasdaq: CNET ) wrapped up the fiscal year in better shape than Wall Street had expected.
In its December quarter, the company saw revenues inch 14% higher to hit $118.4 million. Analysts were only looking for an 8% advance. The company posted a profit of $0.04 a share. If you back out a litany of one-time charges related to financial restatements, backdating scandal investigations, discontinued operations, and stock compensation expenses, the company earned $0.13 a share. That is lower than the $0.15 per share in adjusted profitability from a year ago, but ahead of the $0.12 a share that the market was targeting.
"In the face of many distractions during the fourth quarter, we continued to move our business forward," new CEO Neil Ashe noted in the earnings release, and that's as good a summation as any.
Investors have known for months that it was going to be a tough quarter. Even before executives began falling like flies, CNET had guided its outlook lower. The company's tech and entertainment properties braced themselves for lower ad spending as Microsoft's (Nasdaq: MSFT ) Vista and Sony's (NYSE: SNE ) PS3 got bumped from their original springtime release dates.
Folks continue to flock to CNET's growing family of properties. The company saw unique monthly visitors grow by 17% to 136 million. The number of actual page views fell by 18%, but that was the result of the continued traffic slide at photo-sharing site Webshots.com. Without Webshots, page views are coming in 8% higher than they did a year ago. Revenue growing higher than page views? That is music to the online advertising industry's ears, especially with Google's (Nasdaq: GOOG ) earnings report due up later this week.
More importantly, the outlook for 2007 is solid. With Vista now hitting the market and the next-generation gaming platforms now readily available, CNET doesn't have a crutch to lean on. Thankfully, it doesn't need it. Profits before stock-based compensation expenses should clock in between $0.22 and $0.37 a share. The top line will come in between $425 million and $445 million. Wall Street estimates were perched at $0.20 per share and $426.5 million, respectively.
"Thank you for bearing with us," Ashe noted at the end of last night's conference call. If the company's aim is true and the demons are finally laid to rest, maybe it's investors who should be thanking Ashe.
Longtime Fool contributor Rick Munarriz is a fan of CNET, but still misses the old MP3.com days. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.