LifeLock (LOCK) Beats Third Quarter Estimates, Settles Litigation
Shares of LifeLock Inc. were trading up +3.56 or +36.74 percent to $13.25 per share in Thursday’s premarket after the company announced better than expected third quarter earnings late yesterday. In addition to the earnings beat, the company also announced agreements for the settlement of litigation with the staff of the Federal Trade Commission and a national class of consumers. LifeLock shares closed at $9.69, down -0.06 or -0.62 percent in Wednesday’s regular trading session.
Founded in 2005 by Robert J.
On July 21st of this year, the FTC accused LifeLock of violating a 2010 settlement with the agency and 35 States Attorneys by continuing to make deceptive claims about its services related to identity theft and failing to take action to protect its clients’ data. The original agreement was for LifeLock to pay out $12 million in refunds and to take more stringent measures to safeguard clients’ personal information and to stop making any further deceptive claims. LifeLock stock plunged -38 percent after the news.
LifeLock reported adjusted net income of $27.6 million or $0.28 per diluted share versus $15.5 million or $0.16 per share in the same period one year ago. Revenue for the quarter came to $152.0 million compared to $123 million in last year’s third quarter, an increase of +24 percent. Analysts expected the company to report earnings of $0.25 on $148 million in revenue.
Todd Davis, LifeLock Chairman and Chief Executive Officer said in the company’s press release that, “We are pleased with our performance in the quarter, which reflected a 24% increase in revenues and strong gains in adjusted net income and Adjusted EBITDA. In addition, we believe the agreements we announced today are in the best interest of our shareholders and represent a positive step toward achieving closure on substantial outstanding litigation against the Company. These settlements, if approved, will enable all of us to focus on our mission of protecting our members.”
According to LifeLock, the settlement proposal by the FTC does not require the company to change its current products or services, its marketing and advertising or its business and information security practices. LifeLock has set aside an additional $96 million, bringing the total amount the company has in reserve for settlement of the matter to $116 million.
The $96 million was taken as a pre-tax charge from the company’s third quarter earnings, making the company’s net loss for the quarter -$65.1 million. For the company’s fourth quarter, revenue is expected between $153 million and $155 million with earnings per share of $0.28 to $0.30. Despite this morning’s sharp rally, LifeLock stock is still recovering from the steep selloff after the FTC took steps in July.
Other News About LOCK
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Kerrisdale has acquired a two percent stake in LifeLock.
Protecting Personal Financial Data: All Bets Are Off
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