LifeLock Cuts Its Outlook

LifeLock Inc. on Wednesday lowered its full-year guidance, anticipating that a recent lawsuit from the Federal Trade Commission would drag on results for the remainder of 2015.

Shares--which had plunged after the new lawsuit was disclosed--fell 6% in recent after-hours trading. They have fallen about 54% this year through Tuesday's close.

Arizona-based LifeLock sells identity-theft-protection services.

For the year, it expects revenue between $577 million to $582 million, down from its previous range of $584 million to $590 million. On a per-share basis, adjusted earnings are now expected to be between 58 cents and 61 cents, lower than its previous estimate of 64 cents to 67 cents.

For the current quarter, the company expects revenue in the range of $147 million to $149 million and earnings between 25 cents to 26 cents a share. Analysts had called for revenue of $150 million on earnings of 24 cents a share.

"While we are still early in the process, our updated guidance assumes that the publicity from the lawsuit with the FTC will cause an increase in attrition and headwind to our new member acquisition on a short-term basis," said Chief Financial Officer Chris Power. He added that the company remained "in our long-term growth prospects."

Earlier in July, the FTC filed a lawsuit accusing LifeLock of violating a 2010 settlement and continuing to make deceptive claims about its identity-theft protection services. The 2010 settlement was based on earlier allegations that LifeLock promoted its services with false claims.

The settlement required LifeLock to pay $12 million in consumer refunds, create more stringent measures to safeguard customer information and prohibited the company from making further deceptive claims.

The FTC alleges that LifeLock failed to establish a comprehensive security program, didn't meet record-keeping requirements and falsely advertised that its services provided the same level of security as financial institutions. This happened from a period of at least October 2012 through March 2014, the agency alleged. During a similar time period, the FTC alleged that LifeLock falsely claimed to provide alerts that indicated a problem.

Overall, the company posted earnings of $520,000, or 1 cent a share, compared with a loss of $1.5 million, or 2 cents a share, a year earlier.

Revenue was $145 million, compared with $115.7 million a year earlier.

Consumer revenue grew to $138.3 million from $109.3 million, while enterprise revenue grew to $6.6 million from $6.4 million.

Analysts had expected earnings of 9 cents a share on revenue of $144 million.

Write to Angela Chen at [e-mail]

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