ValueClick Tumbles After Revenue Forecast Trails Estimates

ValueClick Inc., the Westlake Village, California-based Internet-advertising company, fell after forecasting second-quarter revenue that trailed analysts’ estimates as the company reduces paid traffic in its Owned & Operated unit.

ValueClick sank 22 percent to $16.80 at the close in New York, the steepest decline since August 2004. The shares have risen 3.1 percent this year.

The company’s Owned & Operated business, which includes, is winding down other properties in that unit because they’re less profitable than others, said Carter Malloy, an analyst with Stephens Inc. in Little Rock, Arkansas.

“The O&O business has some great owned-content sites in it -- i.e.,” Malloy said in an e-mail. Other smaller sites “can create unnecessary volatility in revenue.”

Revenue in the second quarter will be as much as $160 million, ValueClick said yesterday in a statement. Analysts projected $167.9 million, the average of estimates compiled by Bloomberg.

“We’re very surprised at the stock reaction today as overall the fundamental story is intact,” said Malloy, who rates the shares the equivalent of hold. “Management is executing against the plan and the stock seems undervalued.”

ValueClick reported first-quarter profit excluding certain items of 38 cents a share. Analysts had predicted 34 cents. Revenue for the period rose 31 percent to $152.9 million. That compared to analysts’ estimates of $157.9 million.

Net income rose to $21.6 million, or 26 cents a share, from $16.9 million, or 21 cents, a year earlier.