Earnings estimates for 2012 for VeriSign Inc. ( VRSN ) have increased of late even though the company missed the Zacks Consensus Estimate in the fourth quarter of 2011.

VeriSign recently reported earnings of $0.35 per share in 4Q11, missing the Zacks Consensus Estimate of $0.38.

In the past few years, VeriSign decided to focus its attention on its core competencies to provide highly scaleable, reliable and secure Internet infrastructure services to customers around the world. Hence, the company divested a number of non-core businesses in its portfolio, such as communications, billing and commerce, content delivery, messaging and enterprise security services.

Most recently, the company sold off its Authentication Services business and relocated its headquarters. With this sale, continuing operations primarily consist of Naming Services (comprising Registry Services and Network Intelligence and Availability (NIA) Services).

This restructuring has resulted in a more efficient and more focused VeriSign with opportunities ahead. Management can focus on the standalone business of Naming Services, leading to better execution. VeriSign is also experiencing a recurring revenue stream from its registry businesses, which contribute to better sales visibility.

Additionally, VeriSign has a healthy cash balance with recent divestitures and is making efforts to return the same to investors.

VeriSign earlier announced that the Internet Corporation for Assigned Names and Numbers (ICANN) and Verisign have renewed Verisign's contract to serve as the authoritative registry operator for the .net registry for another six years till 2017. The company also resolved its five-year long litigation with Coalition for ICANN Transparency (CFIT). VeriSign recently announced an increase in registry domain name fees for .com and .net as per the agreement with ICANN.

However, it remains to be seen how the streamlined company generates a growth trajectory given the change in management. The company's CFO recently resigned from his position and the search for a new CFO is on. It still needs to be seen if a change in management will affect the company's performance as the previous management was instrumental in undertaking the bulk of the restructuring that the company has undergone in the last few years.

Although the fundamentals are solid, we have downgraded our recommendation to Neutral from Outp as we believe that most of the positives are already discounted at current levels. Nevertheless, the company has a Zacks #2 Rank, which translates into a short-term Buy rating.