Digital River Inc., a manager of online businesses for companies, dropped 11 percent in after-hours trading after forecasting first-quarter sales and profit less than analysts expected because it will invest more in its software.
Profit will be 48 cents a share, excluding some costs, on sales of $98.5 million, the Eden Prairie-based company said Thursday in a prepared statement released after the markets closed. The average estimate of 13 analysts surveyed by Bloomberg was for profit of 57 cents, while 11 analysts expected an average of $102.3 million in revenue.
The company said it will invest $30 million to improve its "core software business" and related technologies. The investments, which are reflected in the outlook, will begin to provide results in the second half of the year, Chief Executive Joel Ronning said in the statement.
The company said its fourth-quarter profit rose to $20.3 million, or 46 cents a share, compared with $16.4 million, or 36 cents a share, in the year-earlier period.
Revenue rose to $96.9 million, compared with $83 million a year ago. Analysts surveyed by Thomson First Call estimated a profit of 53 cents a share on revenue of $96 million. Digital River shares fell $4.15 to $33.35 in after-hours trading. The shares had climbed $1.32, or 3.7 percent, to $37.50 at the close of trading, and they have risen 13 percent this year.
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