Quinstreet (QNST) reported its earnings for the 1st quarter of 2012 and the nine months ended March 31, 2012, today and they reported lower revenue and earnings than the street was expecting.

Compared to the prior-year quarter, revenue dropped and earnings per share dropped significantly.

QuinStreet revenue was $93.0 million which was down 14% over the same quarter last year,  where they reported $107.7 million.

The street was looking for revenue of $102.6 million.

For the nine month period, the Company reported total revenue of $284.8 million, a decrease of 8% over the same period of the prior year.

Both the education and financial services sectors were off substantially.

For the third quarter, revenue for the Education client vertical was $38.9 million, a decrease of 19% compared to the year-ago quarter.

Revenue for the Financial Services client vertical was $38.9 million, a decrease of 20% compared to the same quarter last year.

Revenue for Other client verticals was $15.3 million, an increase of 39% compared to the year-ago quarter.

Adjusted EBITDA for the third quarter was $17.3 million, or 19% of revenue. EBITDA results included a $1.4 million unexpected bad debt write-off of receivables due the Company by an agency that became insolvent during the quarter. Excluding this effect, adjusted EBITDA for the third quarter would have been $18.7 million, or 20% of revenue.

Adjusted EBITDA for the nine month period was $57.4 million, or 20% of revenue.

The Company reported GAAP net income of $2.9 million, or $0.06 per diluted share, for the third quarter of 2012. GAAP net income for the nine month period was $12.8 million, or $0.27 per diluted share.

Adjusted net income for the third quarter was $9.5 million, or $0.21 per diluted share, and $0.23 per share excluding the write-off. For the nine month period, adjusted net income was $32.0 million, or $0.67 per diluted share. Adjusted net income excludes stock-based compensation expense and amortization of intangible assets, net of estimated tax.

The Company reported GAAP net income of $2.9 million, or $0.06 per diluted share, for the third quarter of 2012. GAAP net income for the nine month period was $12.8 million, or $0.27 per diluted share.

Adjusted net income for the third quarter was $9.5 million, or $0.21 per diluted share, and $0.23 per share excluding the write-off. For the nine month period, adjusted net income was $32.0 million, or $0.67 per diluted share. Adjusted net income excludes stock-based compensation expense and amortization of intangible assets, net of estimated tax.

The Company generated $15.0 million of normalized free cash flow for the third quarter and $44.8 million for the nine month period.

Cash flow from operations totaled $17.4 million for the third quarter and $42.4 million for the nine month period.

The Company now expects total fiscal 2012 revenue to be between $360 and $370 million, and revenue and profits to be down year-over-year in fiscal Q4. The Company continues to target an adjusted EBITDA margin of 20% for the full fiscal year.

“We continue to manage through challenges in Education and Financial Services that are creating uncertainty and weighing on our results,” commented Doug Valenti, QuinStreet CEO. “We are focused on strategies and initiatives that we believe will mitigate or overcome the challenges and return us to growth. Digital performance marketing is an early stage, enormous opportunity, and our assets and capabilities are strong. We continue to pursue opportunities that we believe represent substantial growth potential.”

Share of the company are off around 15% on the news to around $9 a share.

Quinstreet has been the buyer of some of the largest internet properties including Insurance.com and CarInsurance.com