) reported second-quarter 2013 non-GAAP earnings of 21 cents per
share, down from 35 cents reported in the year-ago quarter.
Including stock-based compensation, earnings came in at 17 cents
a share, significantly lower than the Zacks Consensus Estimate of
35 cents per share.
Although revenues increased 3.7% from the year-ago quarter to
$159.7 million, it lagged the Zacks Consensus Estimate of $166
million. Reported revenues also missed management's guided range
of $164 million-$168 million. The year-over-year growth in
revenues was primarily driven by strong performance in the
Affiliate Marketing and the Owned & Operated Websites
Revenues from the Affiliate Marketing segment increased 9%
from the year-ago quarter to $36.6 million while revenues from
Owned and Operated Websites increased 7.7% year over year to
$31.7 million. ValueClick's Media segment reported modest
increase of 0.4% in revenues.
Operating expenses were down 6.0% year over year to $59.6
million. General & administration expenses were down 19.5%
year over year, but technology expenses were up 1.3% year over
year. Expenses related to sales and marketing increased 10.6%
year over year. As a percentage of revenue, operating expenses
were down 390 basis points to 37.3%.
ValueClick's non-GAAP income from operations spiked 26.4% from
the year-ago quarter to $38.2 million. Operating margin increased
from 19.6% in the year-ago quarter to 23.9%, primarily due to
favorable mix toward value added services. Including stock-based
compensation, operating income came in at $43.4 million.
Net income on a non-GAAP basis was $16.3 million compared with
$28.2 million in the year-ago quarter. However, including
stock-based compensation, net income came in at $13.2 million in
Cash and cash equivalents were $127.1 million compared with
$129.1 million in the previous quarter. The company reported free
cash flow of $73.0 million at the end of the reported quarter
For the third quarter of 2013, ValueClick expects revenues in
the range of $164 million-$168 million and non-GAAP earnings in
the range of 39 cents-40 cents per share.
ValueClick forecasts revenues from Affiliate Marketing to grow
in the low double-digits in the third quarter. Revenues from
Owned & Operated Websites are expected to remain flat. For
the third quarter, Media revenues are expected to grow in the low
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.
Moreover, ValueClick is expected to benefit from
exit from the Affiliate marketing business.
However, unfavorable foreign exchange and a sluggish European
market remain near-term headwind. ValueClick continues to face
) which is expected to affect its profitability, going
Currently, ValueClick holds a Zacks Rank #4 (Sell).
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