Demand Media Earnings: Surprises the Street with a Swing Up

Demand Media Inc. (NYSE:DMD) climbed to a profit in the third quarter and beat Wall Street’s expectations in the process. Demand Media, together with its subsidiaries, operates as a content and social media company in the United States. It identifies, creates, distributes, and monetizes in-demand, long-lived content.

Earnings season is back and more important than ever. Get our newest CHEAT SHEET stock picks now

Demand Media Inc. Earnings Cheat Sheet

Results: Reported a profit of $3.2 million (4 cents per diluted share) in the quarter. Demand Media Inc. had a net loss of $4.1 million or a loss 5 cents per share in the year-earlier quarter.

Revenue: Rose 20.5% to $98.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Demand Media Inc. reported adjusted net income of 11 cents per share. By that measure, the company beat the mean estimate of 4 cents per share. It beat the average revenue estimate of $79.7 million.

Quoting Management: “Demand Media’s audience surpassed 125 million monthly unique visitors during the third quarter, as we delivered record revenue and profitability,” said Richard Rosenblatt, Chairman and CEO of Demand Media. “For the first time in over a year, we increased our content investments for two consecutive quarters as we expanded the distribution of our content platform. We remain focused on our long-term growth initiatives, which include continuing to increase our investment in core content as well as in opportunities across mobile, video, international, and new generic Top Level Domains.”

Key Stats:

Revenue has risen the past four quarters. Revenue increased 17.1% to $93.1 million in the second quarter. The figure rose 8.4% in the first quarter from the year earlier and climbed 14.7% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company beat estimates last quarter after being in line with expectations in the second quarter with net income of 3 cents per share.

Looking Forward: Expectations for the fourth quarter have not changed from 5 cents. For the fiscal year, the average estimate has moved up from 12 cents a share to 13 cents over the last ninety days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

Don’t Miss These Additional Hot Stories:

Is AT&T’s Stock a Buy as iPhone Sales Soar?

Is LinkedIn Still a Wall Street Darling?

Should Netflix Shareholders Hope for a Buyout?