Having already warned investors two weeks in advance that weakness in display advertising would mean a rough second half, online ad company ValueClick (NSDQ: VCLK) said Q2 net income was $16.5 million ($0.17 per diluted common share) down 6.3 percent from last year’s $17.6 million ($0.17 per diluted common share). Revenue for the quarter of 2008 was $163.8 million, a 10 percent rise from $148.7 million in Q207, thanks in part to a boost from MeziMedia, which ValueClick bought in July 2007. Details from the lead gen company’s Q2 report included:
— The $163.8 million in revenue was one percent below the low end of the $166- to $170 million guidance range issued on May 6, but within the $163 to $164 million range ValueClick warned of earlier this month.
— Adjusted-EBITDA of $43.5 million was above the $40 to $42 million guidance range issued back in May; and diluted net income per common share of $0.17 was above the high end of the $0.15 to $0.16 guidance range at that time as well.
— Update: The hold music before ValueClick’s conference call started was oddly appropriate given the worsening outlook: the theme from the film The Crying Game… More from the Q&A after the jump.
CEO Tom Vadnais said he was encouraged that it was flat, which signaled that the Federal Trade Commission and state regulatory reviews had likely been completed. Back in February, ValueClick agreed to a $2.9 million settlement with the FTC over charges of deceptive lead generation practices. Still, Vadnais said there was no question that the economy has impacted the segment as well. On a more positive note, the company’s affiliate marketing business rose 10 percent. However, looking ahead, CFO John Pitstick said Q3 revenue was trending lower than Q2.
—Q&A: Asked about concerns over display ad growth, David Yovanno, ValueClick’s COO, said that in general, marketers are pulling back. But he argued that the technology improvements ValueClick has developed will help them weather the challenges. Meanwhile, Europe’s displays revenues look stronger, Vadnais said.