VeriSign's stock falls amid profit-margin worries

VeriSign shares retreat after management forecast suggests profit margins may have peaked

Associated Press

SAN FRANCISCO (AP) -- VeriSign Inc.'s stock slid nearly 6 percent Friday amid concerns that the Web domain-name registration company's profit margins may be narrowing.

Investors were reacting to a VeriSign forecast accompanying the company's fourth-quarter earnings report, which came out late Thursday. While the numbers for the last quarter fell in line with analysts' predictions, VeriSign's projections indicated that the company's recent streak of widening profit margins may be coming to an end, according to Citigroup analyst Walter Pritchard.

"Margin surprises had been a driver of the stock and investors continue to expect this," Pritchard wrote in a Friday research note. "However, margins appear to be approaching a ceiling."

VeriSign's shares fell $3.24 to $52.18 in afternoon trading.

The Reston, Va., company's earnings rose 68 percent last year to $544 million. VeriSign's steadily rising profit contributed to a 54 percent gain in the company's stock price last year.

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