j2 Global Inc.
) recently closed the acquisition of Zintel Communications' New
This is the company's second acquisition within a span of 6
months in the Asia-Pacific region, after acquring the Australian
subsidiary of Zintel Communications in March 2012. However, the
terms and conditions of the deal were not disclosed by any of the
j2 Global offers outsourced, value-added messaging and
communications services to both businesses and individuals
supported by a vast array of global telephony/Internet Protocol
(IP) networks apart from providing digital faxing, voicemail,
email, and call handling services. The company's networks span over
4,200 cities in about 49 countries.
Recently, j2 Global declared its second-quarter 2012 financial
results with both revenue and EPS beating Zacks Consensus
Estimates. Additionally, the Board of Directors hiked its quarterly
dividend by 2.3% to 22 cents per share from 21.5 cents in the
reported quarter, maintaining its streak of dividend increases for
four consecutive quarters.
The company offers its cloud-based business to more than 2
million customers and is confident about its growth. We believe
this is a strategic acquisition by the company which, when
completed, will strengthen its cloud voice business in the
Asia-Pacific region and will enhance the experience of its New
Zealand subscribers by integrating with Zintel's cloud based
j2 Global primarily depends on inorganic growth for expansion
and has acquired the cloud service business of several companies
since the beginning of the year, including Offsite Backup Solution
LLC, Landslide Technologies Inc. and Zimo Communications Ltd.
Despite stiff competition from
Open Text Corp.
), we believe the company's strong financial position and
diversified product pipeline coupled with the recent acquisitions
will foster incremental growth going forward.
The current Zacks Consensus Estimate for j2 Global is pegged at
57 cents for the third quarter of 2012 with a growth rate estimate
of (2.54%). For 2012 and 2013, the Zacks Consensus Estimates stand
at $2.43 and $2.45, respectively, with growth rates of (1.42%) and
We thus maintain our long-term Neutral recommendation on j2
Global. Currently, JCOM holds a short-term Zacks #3 Rank (Hold) on
J2 GLOBAL INC (JCOM): Free Stock Analysis
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