Though Verisign (VRSN -4.9%) beat Q4 estimates, the company guided on its CC (transcript) for 2014 revenue of $1B-$1.02B; the midpoint is slightly below a $1.02B consensus. The domain name registrar/site authentication provider also guided for a 2014 op. margin of 58%-60%; that compares with a 2013 level of 58.5% (up 230 bps Y/Y).
Citing margin growth concerns, Citi's Walter Pritchard has cut shares to sell. "Margin surprises had been a driver of the stock and investors continue to expect this ... However, margins appear to be approaching a ceiling."
In tandem with its results, Verisign has announced it will repatriate $700M-$800M worth of cash in Q2 or Q3 in "a tax-efficient manner" by leveraging a $375.3M income tax benefit it recorded in Q4 related to the liquidation of a domestic subsidiary.
The company also says its board has approved increasing Verisign's buyback by $528M to $1B (good for repurchasing 14% of shares at current levels).
Verisign's deferred revenue rose by $43M in 2013 to $856M, and the number of active .com/.net domain names handled by its registry business rose 5% to 127.2M.