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ValueClick Inc. (VLCK) is slated to release its first quarter 2011 results after the closing bell today.

The Zacks Consensus Estimate for the first quarter of 2011 is pegged at 18 cents per share, reflecting a year-over-year growth of 28.6%.

ValueClick posted an average earnings surprise of 17.25% in the trailing four quarters, implying that it has outpaced the Zacks Consensus Estimate by the same magnitude in the last four quarters.

Fourth Quarter Highlights

ValueClick’s fourth quarter 2010 earnings beat the Zacks Consensus Estimate of 23 cents per share by 6 cents. Earnings (including stock-based compensation but excluding amortization of intangibles) were 29 cents per share, up 26.1% year over year from 23 cents per share reported in the prior-year quarter.

Better-than-expected earnings in the quarter were primarily due to higher revenues, reduction in operating expenses and improved margins.

Adjusted EBITDA increased 19.0% year over year to $41.9 million and was 32.5% of revenues in the fourth quarter. This was above ValueClick’s guided range of $39.0 to $40.0 million or 32.0% of revenue at the midpoint.

Revenue increased 16.6% year over year to $128.7 million in the quarter. The reported revenue also surpassed management’s guided range of $122.0 to $126.0 million and the Zacks Consensus Estimate of $125.0 million.

Revenues were primarily driven by strong growth in the Affiliated Marketing segment (28.1% of the total revenue), which grew 14.7% year over year to $36.2 million. The growth was driven by higher transactional volumes in the commission junction marketplace, in which ValueClick holds the #1 position.

Guidance

Guidance for the first quarter exceeded analysts’ expectations. For the first quarter of 2011, ValueClick expects revenues in the $111.0-113.0 million range.

On a year-over-year basis, ValueClick expects revenue from Media and Affiliate Marketing to grow in the low double-digit percentage range. Owned & Operated websites are expected to increase in the high twenties to low thirties percentage range. Technology is expected to grow in the low to mid single-digit range in the first quarter.

Adjusted EBITDA is expected in the range of $31.0-32.0 million, which represents an adjusted EBITDA margin of 28.0% at the midpoint. Earnings on a GAAP basis are projected in the range of 16 cents to 17 cents per share, while earnings on a non-GAAP basis are expected in the range of 21 cents to 22 cents.

Estimate Revision Trend

Specifically, five out of the 17 analysts covering the stock raised their estimates in the last 30 days. Over the last week, five analysts upgraded their estimates, while none moved in the opposite direction. Overall, estimates for the first quarter have inched up in the last seven days from 17 cents per share to 18 cents per share.

Recommendation

Strength in the Internet advertising industry, increasing e-commerce spending, growing display ad trends in the U.S, synergies from the recent acquisition of mobile ad company, Greystripe, share repurchases, impressive cash flow and debt free balance sheet are positives for the company.

However, intense competition from Google Inc. (NASDAQ:GOOG), Microsoft Corp. (NASDAQ:MSFT) and Yahoo Inc. (NASDAQ:YHOO) is reason for concern. Although we expect the company to deliver improved results in 2011, we maintain our Neutral rating on the stock until more sustained growth is evident.

The stock currently has a Zacks # 2 Rank, which translates to a short-term Buy rating.

Source: ValueClick Earnings Preview