j2 Global Inc.
(
JCOM
) reported weaker-than expected fourth-quarter 2011 financial
results yesterday, after market close. However, the board of
directors of j2 Global has raised its quarterly dividend by 2.4%
from 20.5 cents per share to 21 cents per share and authorized a
share buy back program to repurchase 5 million of common shares of
j2 Globalthe company within February 20, 2013.
Quarterly GAAP net income came in at $29.8 million or 62 cents
per share compared with $26.9 million or 58 cents per share in the
year-ago quarter. However, fourth-quarter adjusted (excluding
special items) EPS of 51 cents was far below the Zacks Consensus
Estimate of 59 cents. Total revenue was $865.1 million, up 19.8%
year over year, missing the Zacks Consensus Estimate of $86
million. Subscriber Usage revenue stood at $84.2 million, up 19.7%
year over year.
Quarterly gross margin was 82.8% compared with 82.1% in the
year-ago quarter. Operating expenses in the reported quarter were
$31.9 million compared with $32 million in the prior-year quarter.
Quarterly operating margin was 45.2% compared with 37.1% in the
prior-year quarter. In 2011, j2 Global generated $150.8 million in
cash from operations compared with $96.4 million in 2010. Free cash
flow in 2011 was $143.9 million compared with $94.5 million in
2010.
At the end of 2011, j2 Global had approximately $221 million in
cash & marketable securities on its balance sheet compared with
$78.8 million at the end of 2010. 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%
- 26%.
Our Recommendation
Despite stiff competition from
EasyLink Services International Corp.
(
ESIC
) and
Open Text Corp.
(
OTEX
), 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 #2 Rank
(Buy rating) on the stock.
EASYLINK SVCS (
ESIC
): Free Stock Analysis Report
J2 GLOBAL INC (
JCOM
): Free Stock Analysis Report
OPEN TEXT CORP (
OTEX
): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment
Research