24/7 Real Media Loss Narrows but Misses; Hires Lehman, Shares Jump

24/7 Real Media reported a Q1 net loss of $56,000, or breakeven in terms of EPS (vs. -$7.52m, or -$0.16/share last year). Adjusted EPS of $0.08 was a penny y/y improvement, but three cents shy of the Street's forecast. A 34% rise in revenues to $57.7m also came up short of analysts' average estimate ($59m). 24/7 expects Q2 pro forma EPS between $0.09 - $0.12, compared to the Street's estimate of $0.13. Its full year EPS forecast of $0.52 - $0.55 tops analysts' consensus estimate of $0.52. In its earnings press release, 24/7 said it retained Lehman Brothers to assist in its assessment of strategic alternatives. On May 1, the New York Post (citing unnamed sources) reported Microsoft was considering a $1b buyout, which sent its shares soaring 20% to $11.97. It rallied 3.7% to $11.10 during normal trading Wednesday and climbed 4.2% to $11.57 in after-hours activity on volume of more than 686,000.

Sources: Press release, Bloomberg, MarketWatch
Commentary: 24/7 Real Media Shares Skyrocket on $1 Billion Microsoft Buyout Rumor • WPP - 24/7 Real Media Rumors: A Deal Makes Sense • 24/7 Real Media Down On “Missed Opportunities” • 24/7 Real Media Earnings Conference Call Transcript (later today)
Stocks/ETFs to watch: 24/7 Real Media Inc. (TFSM). Competitors: aQuantive Inc. (AQNT), ValueClick Inc. (VCLK), DoubleClick [privately held, agreed to be acquired by Google (GOOG) in April]

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