ValueClick cuts full-year outlook

Shares of ValueClick Inc., the second-biggest U.S. Internet advertising broker, had their biggest drop in three years after the company lowered its full-year revenue and earnings forecasts.

ValueClick, which had forecast per-share profit of as much as 81 cents, said earnings would rise to 74 cents to 76 cents this year from the 63 cents it reported in 2006.

Second-quarter net income rose 22% to $17.6 million, or 17 cents a share, the company said, up from $14.4 million, or 14 cents, a year earlier. The average estimate of 14 analysts surveyed by Bloomberg was 18 cents.

Sales rose to $148.7 million from $130 million. The average estimate from analysts was $159.3 million.

Revenue from the company’s so-called lead generation business, which includes online sweepstakes, fell during the quarter after the Federal Trade Commission started investigating the practice in May, Chief Executive Tom Vadnais said. The FTC is investigating whether promises of free gifts violate U.S. laws.

Shares of ValueClick fell $5, or 19%, to a nine-month low of $21.01.

The FTC also is investigating whether ValueClick failed to identify e-mail marketing campaigns as ads, the company said in a May regulatory filing.

The area the FTC is examining accounts for 15% to 20% of ValueClick’s revenue, Vadnais said May 31, a day after he took over as CEO.

The company cut its sales forecast for the full year to $645 million to $660 million after projecting as much as $665 million.