j2 Global (JCOM) Q1 Earnings Lag, Sales Top; Dividend Up
j2 Global, Inc. JCOM posted mixed results in the first quarter of 2016, with earnings missing estimates and revenues beating the same. The Los Angeles, CA-based company’s first-quarter adjusted earnings of $1.02 per share (including stock-based compensation expenses) lagged the Zacks Consensus Estimate by 9 cents. However, earnings increased over 25% on a year-over-year basis.
Quarterly revenues came in at $200.5 million, up 24.3%. The top line was also ahead of the Zacks Consensus Estimate of $196 million. Segment-wise, total Cloud Service revenues expanded 18.3% to $137 million in the reported quarter. Digital Media revenues came in at $62.3 million, up 44.2%. IP Licensing revenues, however, contracted 47.8% to $1.2 million in the first quarter of 2016.
j2 Global posted quarterly gross margin of 82.9% compared with 82.5% in the year-ago quarter. Operating expenses in the quarter under review stood at $112.9 million, up 22% from the year-ago quarter. Quarterly EBITDA stood at $86.7 million, up 25.1% year over year.
Free cash flow, at the end of the reported quarter, was $60.5 million, up 38.8%. j2 Global exited the first quarter of 2016 with approximately $242.8 million in cash & cash equivalents compared with $255.5 million at the end of 2015. Long-term debt at the end of the reported quarter was $594.4 million compared with $592 million at the end of 2015.
Dividend
In a shareholder friendly move, the company’s board of directors declared a 3.1% increase in its quarterly dividend, raising the figure to 33.5 cents per share. This marks the nineteenth successive quarterly dividend increase. The payment will be made on Jun 2, 2016, to shareholders of record as of May 18. The dividend hike impacted the stock positively.
2016 View
The Internet and cloud services company continues to expect 2016 revenues in the band of $830 million to $860 million. The earnings (on an adjusted basis) projection is maintained in the range of $4.70 to $5.00. The Zacks Consensus Estimate for 2016 earnings is pegged at $4.85 per share on revenues of $849 million.
Zacks Rank & Key Picks
j2 Global presently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include Box, Inc. BOX, Medical Transcription Billing, Corp. MTBC and Black Knight Financial Services, Inc. BKFS. While Box and Medical Transcription Billing sport a Zacks Rank #1 (Strong Buy), Black Knight Financial Services carries a Zacks Rank #2 (Buy).
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