after the closing bell,
j2 Global Inc.
) reported excellent third-quarter 2012 financial results, with
record high quarterly revenue, earnings per share, EBITDA, and
churn rate. Management seems more confident about the rest of
2012 as it raises the company's full year 2012 non-GAAP earnings
per share guidance.
Additionally, the Board of Directors of j2 Global has hiked
its quarterly dividend by 2.3% from 22 cents per share to 22.5
cents per share, maintaining its streak of dividend increases for
five consecutive quarters. The new dividend rate implies a 12.5%
increase compared to the first dividend paid by j2 Global in
Quarterly GAAP net income came in at $31.7 million or 69 cents
per share compared with $25.5 million or 54 cents per share in
the year-ago quarter. Third-quarter adjusted earnings per share
of 65 cents were well above the Zacks Consensus Estimate of 57
cents. Total revenue was approximately $93.2 million, up 8.4%
year over year, easily beating the Zacks Consensus Estimate of
$89 million. Subscriber Usage revenue stood at $89.5 million, up
4.5% year over year.
j2 Global posted quarterly gross margin of 82.5% compared with
82.6% in the year-ago quarter. Operating expenses in the reported
quarter were $34.7 million compared with $34.6 million in the
prior-year quarter. Quarterly operating margin was 45.3% compared
with 42.4% in the comparable quarter last year. Churn rate, in
the third quarter of 2012, was a record low of less than
In the third quarter of 2012, j2 Global generated $38.2
million of cash from operations compared with $28.7 million in
the year-ago quarter. Free cash flow, in the reported quarter was
$37.2 million, remaining same year over year. At the end of the
third quarter of 2012, j2 Global had around $469.8 million in
cash & marketable securities on its balance sheet compared
with $221 million at the end of 2011. At the end of the previous
quarter, the company had $245.1 million of debt and the
debt-to-capitalization ratio was 0.30.
j2 Global has raised its fiscal 2012 financial outlook.
Management expects total revenue in the range of $345 million -
$365 million, while non-GAAP EPS is expected to exceed the
year-ago figure. Non-GAAP effective tax rate is estimated in the
range of 24% - 26%.
Despite stiff competition from EasyLink Services International
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.
J2 GLOBAL INC (JCOM): Free Stock Analysis
OPEN TEXT CORP (OTEX): Free Stock Analysis
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