j2 Global Inc.
) reported better-than expected first-quarter 2012 financial
results yesterday, with a record high quarterly revenue. The Board
of Directors of j2 Global has raised its quarterly dividend by 2.4%
from 21 cents per share to 21.5 cents per share. This is the
company's third consecutive quarterly dividend increase.
Quarterly GAAP net income came in at $28.5 million or 61 cents
per share compared with $30.9 million or 66 cents per share in the
year-ago quarter. First-quarter earnings per share of 61 cents were
well above the Zacks Consensus Estimate of 57 cents. Total revenue
was approximately $86.7 million, up 18.1% year over year, and
managed to beat the Zacks Consensus Estimate of $86 million.
Subscriber Usage revenue stood at $84.8 million, up 16.4% year over
Quarterly gross margin was 81.7% compared with 78.5% in the
year-ago quarter. Operating expenses in the reported quarter were
$33.2 million compared with $34.5 million in the prior-year
quarter. Quarterly operating margin was 43.4% compared with 31.2%
in the prior-year quarter. However, churn rate, in the first
quarter of 2012, was a record low of 2.4%. In the previous quarter,
j2 Global added a net 22,000 DIDs (Dial In Demand).
In the first quarter of 2012, j2 Global generated $38.9 million
of cash from operations compared with $38.2 million in the year-ago
quarter. Free cash flow, in the reported quarter, was $18 million
compared with $36.1 million in the prior-year quarter. At the end
of the first quarter of 2012, j2 Global had approximately $193.3
million in cash & marketable securities on its balance sheet
compared with $221 million at the end of 2011. Besides, the company
had no outstanding debt on its balance sheet.
Future Financial Outlook
j2 Global maintained its fiscal 2012 financial outlook.
Management expects total revenue in the range of $345 million -
$365 million. Non-GAAP EPS is expected to remain same year over
year. Non-GAAP effective tax rate is estimated in the range of 24%
Despite stiff competition from
EasyLink Services International Corp.
Open Text Corp.
), we believethe company's strong financial position and
diversified product pipeline, as well as its long-term growth
prospects of outsourced value-added messaging services and
continuous subscriber growth will drive earnings higher in the near
future. We, thus, maintain our long-term Neutral recommendation on
j2 Global. Currently, the company holds a short-term Zacks #3 Rank
(Hold) on the stock.
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