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Network Solutions soars
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February 10, 2000: 4:47 p.m. ET
Earnings, shares leap as new Web registrations up 50% quarter-on-quarter
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NEW YORK (CNNfn) - Internet domain-name registrar Network Solutions on Thursday said fourth-quarter profit more than doubled on a 143-percent increase in revenue, sparking a 14 percent jump in the company's shares as profit beat analysts' estimates.
The Herndon, Va.-based company said net income for the quarter ended Dec. 31 was $9 million, or 25 cents per diluted share, up 142 percent from $3.7 million, or 11 cents a share during the same period in 1998. Revenue for the quarter rose to $75.9 million from $31.3 million.
Analysts polled by earnings tracker First Call expected quarterly profit of 23 cents per share.
Network Solutions shares rose 36-5/16 to 292-5/16 in Nasdaq trade Thursday, a 14.2 percent advance.
Executives at Network Solutions (NSOL: Research, Estimates) -- which manages the Internet's primary domain-name system, through which the familiar dot.com, dot.net, dot.org and dot.edu Web-site suffixes are administered - attributed the quarter's strong results to a sharp increase in demand for new Web addresses.
"In the fourth quarter, we began to see the tremendous untapped potential for Internet identities worldwide as new registrations grew 50 percent from the previous quarter," Jim Rutt, Network Solutions' chief executive, said in a statement.
Network Solutions, which manages the largest database of Internet domain-names, derives its revenue mostly from annual registration fees from anyone who wishes to establish a new Web-site address.
Until last fall, the company had been the exclusive provider of domain-name registration services under a contract it had held with the U.S. Commerce Department.
In an agreement reached in November with the Internet Corporation for Assigned Names and Numbers, or ICANN, a non-profit oversight group, Network Solutions opened up the Internet domain-name registration business to competition. At present there are 98 accredited Internet domain-name registrars, including Register.com and America Online (AOL: Research, Estimates).
Just last week, the U.S. Justice Department officially closed its antitrust probe into Network Solutions.
During the most recent quarter, the company said it registered 1.6 million new domain names, up 161 percent from the fourth quarter of 1998. In all of 1999, Network Solutions registered 5 million new domain names, compared with 1.9 million the previous year.
Net income for the whole of 1999 rose 139 percent to $26.9 million, or 77 cents per diluted share. Revenue for the year totaled $220.8 million, up 136 percent from 1998, the company reported. 
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