Demand Media Posts A Profit But Forecasts Losses Ahead

Reporting its first quarterly results since going public in late January, Demand Media (NYSE: DMD) said its sales during its fourth quarter increased 33 percent to $73.6 million, while its net income increased to $1 million, up from a loss of $3.9 million during the same period a year ago. Both figures were (slightly) ahead of the content farm’s expectations: The company had said last month in a filing with the SEC that it expected to report at most a profit of $600,000 and sales of $73.5 million for the quarter.

The results were largely driven by a standout performance at the company’s content and media segment, which includes sites like Livestrong and eHow. Sales at those operations were up 46 percent during the quarter; by contrast, revenue at Demand Media’s smaller domain registration business was up 14 percent.

Despite this quarter’s profit, however, the company said it expected to post losses during the first quarter and the year ahead. Demand Media said it expected to post a loss from operations of between $7.1 million and $8.6 million during the first quarter and between $1.4 million and $7.4 million for all of 2011. Sales are expected to grow between 23 percent and 28 percent during the year ahead.