) reported first quarter 2013 non-GAAP earnings of 42 cents per
share, up 16.7% from the year-ago quarter. Reported earnings also
surpassed management's guided range of 39 cents-41 cents per
Including stock-based compensation, earnings came in at 39
cents a share, ahead of the Zacks Consensus Estimate of 35 cents
Revenues increased 13.0% year over year to $165.4 million but
lagged the Zacks Consensus Estimate of $166 million. Reported
revenues were at the lower end of management's guided range of
$165 million-$168 million. The year-over-year growth in revenue
was primarily driven by strong performance from the Media,
Affiliate Marketing segment and Owned & Operated segment.
Revenues from the Media segment increased 19.2% from the
year-ago quarter to $96.3 million while a modest increase of 1.6%
was reported in the Affiliate Marketing segment ($38.3 million).
Revenues from Owned and Operated websites increased 8.0% year
over year to $30.9 million.
Operating expenses were down 2.5% year over year to $61.3
million. General & administration expenses were down 6.9%
year over year while technology expenses were up 3.9% year over
year. Expenses related to sales and marketing increased 7.3% year
ValueClick's income from operations spiked 18.1% from the
year-ago quarter to $59.9 million. Operating margin increased
from 34.6% in the year-ago quarter to 36.2%, primarily due to
higher revenue base. Including stock-based compensation,
operating income came in at $55.1 million.
Net income on a non-GAAP basis was $32.7 million compared with
$29.9 million in the year-ago quarter. However, including
stock-based compensation, net income came in at $29.9 million in
Cash and cash equivalents were $129.1 million compared with
$136.6 million in the previous quarter. The company reported free
cash flow of $48.1 million at the end of the reported
For the second quarter of 2013, ValueClick expects revenue in
the range of $164 million-$168 million and non-GAAP earnings in
the range of 38 cents-40 cents per share.
ValueClick forecasts revenues from Affiliate Marketing to grow
in the high-single digit range in the second quarter. Revenues
from Owned & Operated websites are expected to increase by
mid-single digits. For the second quarter, Media revenue is
expected to grow in the high-single digits.
We believe that ValueClick's strong product portfolio, aided
by accretive acquisitions, will continue to drive market share
going forward. The company is realigning its operations toward
high-margin business, which is expected to drive profitability
going forward. Moreover, ValueClick is expected to benefit from
exit from the Affiliate marketing business.
However, unfavorable foreign exchange and a sluggish European
market remain headwind in the near term. ValueClick continues to
face competition from
), which is expected to affect its profitability going
Currently, ValueClick has a Zacks Rank #2 (Buy).
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