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Demand Media now in the black, posts debut earnings ahead of forecast

February 22, 2011 |  2:17 pm

Demand Media, an online publisher whose initial public offering earlier this year was a hot commodity on Wall Street, posted its first profitable quarter Tuesday.

The Santa Monica company, best known for its how-to articles and videos, reported a $1-million profit on $73.6 million in sales for the fourth quarter ending Dec. 31. The results were better than what Demand Media had forecast in its IPO filing, which projected sales to be between $71.5 million and $73.5 million. It also predicted net income to be somewhere between a $1.9-million loss to a $600,000 profit.

Since its launch in 2006, Demand Media had racked up $53 million in losses until the fourth quarter.

Its positive margins appear to be temporary. The company said it expected to dip back into the red in the current quarter and for the fiscal year. It projected operating losses between $7.1 million and $8.6 million for the current quarter, and between $1.4 million and $7.4 million in losses for the full year.

Its shares, which gained 24 cents to close at $22.88, lost 48 cents in after-hours trading following the downbeat earnings forecast.

-- Alex Pham