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Liquidity Services shares tumble on guidance

WASHINGTON (AP) -- Shares of Liquidity Services Inc. tumbled more than 17 percent in Thursday morning trading, after the online auction operator posted a 77 percent jump in fiscal fourth-quarter net income, but warned that global economic conditions remain tough. It issued a lower-than-expected profit prediction for the current period.

The Washington-based company auctions surplus and salvage goods from government and business clients through a number of websites.

For the quarter ended Sept. 30, Liquidity Services earned $5.5 million, or 17 cents per share, up from $3.1 million, or 10 cents per share, in the same quarter last year. Excluding stock compensation, amortization and acquisition-related costs, it posted an adjusted profit of 40 cents per share.

Total revenue from continuing operations rose 54 percent to $122.3 million, as large commercial and government clients hired the company to handle more of their excess inventory and high value capital asset sales.

Analysts, on average, expected a profit of 37 cents per share on $114.6 million in revenue, according to FactSet.

For the full 2012 fiscal year, the company earned $48.3 million, or $1.47 per share, up from $8.5 million, or 29 cents per share, a year ago. Total revenue from continuing operations increased to $475.3 million from $327.4 million.

Liquidity Services said that while the economy has improved, it remains cautious about the effect of volatile economic conditions on retail and industrial supply chains, as well as GDP growth.

It expects investments of several million dollars to integrate its GoIndustry acquisition will be a drag on earnings in the first half of fiscal 2013. It previously expected the acquisition to boost its profits through 2013.

For the fiscal first quarter, Liquidity expects an adjusted profit of 36 to 40 cents per share. The average call from analysts is 46 cents per share.

The company also projected an adjusted 2013 profit of $2.05 to $2.23 per share, while analysts expect $2.19 per share.

Shares of Liquidity Services fell $7.58, or 17.3 percent, to $36.15 in heavy morning trading, after dropping as low as $35.74 earlier in the day. Over the past 52 weeks, the stock has traded between $29.30 and $66.57.