j2 Global Inc.
) reported better-than-expected financial results for the first
quarter of 2014. Net profit significantly outpaced the Zacks
Consensus Estimate, whereas total revenue was in line with the
same. However, the top line surged significantly over the
Additionally, the company's board of directors declared a 2.9%
sequential increase in its quarterly dividend, raising the figure
to 27 cents per share from 26.25 cents. This is in sync with j2
Global's streak of dividend increases for the last eleven quarters.
The new dividend rate implies a 12.5% year-over-year increase.
Earlier, the board extended its one-year five million share
repurchase program set to expire on Feb 20, 2014, by one more
Quarterly GAAP net income came in at $28.8 million or 60 cents
per share compared with $22.9 million or 49 cents per share in the
year-ago quarter. First-quarter adjusted earnings per share stood
at 73 cents, easily surpassing the Zacks Consensus Estimate of 67
cents. Quarterly total revenue was approximately $134.1 million, up
18.1% year over year and almost in line with the Zacks Consensus
Estimate of $134 million.
j2 Global posted quarterly gross margin of 82.6% compared with
82.2% in the year-ago quarter. Operating expenses in the reported
quarter were $69.2 million as against $60.4 million in the
prior-year quarter. Quarterly operating margin was 31% against 29%
in the comparable quarter last year. Quarterly EBITDA stood at
$57.3 million, up 18.9% year over year.
Churn rate, in the first quarter of 2014, was a record low of
2.34% compared with 2.4% in the year-ago quarter. In the first
quarter of 2014, j2 Global generated $37.3 million of cash from
operations compared with $40.1 million in the year-ago quarter.
Free cash flow, in the reported quarter, was $34.4 million compared
with $38.1 million in the prior-year quarter.
At the end of the first quarter of 2014, j2 Global had around
$315 million in cash & marketable securities on its balance
sheet compared with $345.9 million at the end of 2013. At the end
of the reported quarter, the company had $245.8 million of debt as
against $245.7 million at the end of 2013. The
debt-to-capitalization ratio stood at 0.25 against 0.26 at the end
For fiscal 2014, management expects total revenue in the band of
$580-$600 million. Non-GAAP earnings per share are expected in the
$3.23-$3.47 range. Share-based compensation expense will likely to
be $10-$12 million. Non-GAAP effective tax rate is estimated
between 27% and 29%.
Other Stocks to Consider
j2 Global currently has a Zacks Rank #3 (Hold). Other
better-ranked stocks in the Internet/Application software industry
Model N Inc.
Synchronoss Technologies Inc.
). Currently, both Support.com and Synchronoss sport a Zacks Rank
#1 (Strong Buy) while Model N has a Zacks Rank #2 (Buy).
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