j2 Global Inc.
) reported strong financial results for the fourth quarter of
2013. Net profit significantly outpaced the Zacks Consensus
Estimate, whereas total revenue marginally missed the same.
However, the top line surged significantly over the prior-year
More importantly, management provided an extremely strong
outlook for fiscal 2014. As a result, in the aftermarket trade in
Nasdaq, the stock price of j2 Global soared $9.16 (19.56%) to
Additionally, the company's board of directors declared a 2.9%
sequential increase in its quarterly dividend, raising the figure
to 26.25 cents per share from 25.5 cents. This is in sync with j2
Global's streak of dividend increases for the last ten quarters.
The new dividend rate implies a 13% year-over-year increase.
The board also extended the 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 $20.8 million or 44 cents
per share compared with $30.2 million or 65 cents per share in
the year-ago quarter. Fourth-quarter adjusted earnings per share
stood at 77 cents, easily surpassing the Zacks Consensus Estimate
of 69 cents.
Quarterly total revenue was approximately $138 million, up
35.3% year over year but slightly below the Zacks Consensus
Estimate of $139 million.
j2 Global posted quarterly gross margin of 83.9% compared with
81.7% in the year-ago quarter. Operating expenses in the reported
quarter were $65.3 million compared with $41.1 million in the
prior-year quarter. Quarterly operating margin was 36.6% against
41.4% in the comparable quarter last year. Quarterly EBITDA stood
at $65.6 million, up 26.9% year over year.
Churn rate, in the fourth quarter of 2013, was a record low of
2.17% compared with 2.2% in the year-ago quarter. Addition of net
paid Dial in Demand (DID) was approximately 17,000 in
fourth-quarter 2013, leading to a total net paid DID of a
record-high 2.23 million as of Dec 31, 2013. Average revenue per
user (ARPU) per DID was $12.75.
In 2013, j2 Global generated $193.3 million of cash from
operations compared with $169.9 million in 2012. Free cash flow,
in 2013, was $177.4 million compared with $166 million in
At the end of 2013, j2 Global had around $345.9 million in
cash & marketable securities on its balance sheet compared
with $323.7 million at the end of 2012. At the end of 2013, the
company had $245.7 million of debt as against $245.2 million at
the end of 2012. The debt-to-capitalization ratio was 0.26
against 0.29 at the end of 2012.
For fiscal 2013, management expects total revenue of $580-$600
million. Its mid-point of $590 million is well above the current
Zacks Consensus Estimate of $549 million.
Non-GAAP earnings per share (EPS) are expected in the
$3.23-$3.47 range. Including around $0.03 per share of
stock-based compensation expenses, the mid-point of non-GAAP EPS
stands at $3.32, which is significantly above the current Zacks
Consensus Estimate of $2.59. 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
Model N Inc.
Constant Contact Inc.
). Currently, Model N has a Zacks Rank #1 (Strong Buy) while both
Constant Contact and E2open have a Zacks Rank #2 (Buy).
CONSTANT CONTAC (CTCT): Free Stock Analysis
E2OPEN INC (EOPN): Free Stock Analysis Report
J2 GLOBAL INC (JCOM): Free Stock Analysis
MODEL N INC (MODN): Free Stock Analysis
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