Digital River Inc. Earnings Cheat Sheet: Net Income Beats Expectations

Although Digital River, Inc.’s (NASDAQ:DRIV) net income fell in the third quarter from a year earlier, profit exceeded analysts’ expectations. Digital River provides end-to-end global e-commerce and marketing solutions to a variety of companies in software, consumer electronics, computer games, video games, and other markets.

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Digital River Earnings Cheat Sheet for the Third Quarter

Results: Net income for the internet software and services company fell to $5.5 million (15 cents per share) vs. $5.9 million (15 cents per share) a year earlier. This is a decline of 5.9% from the year earlier quarter.

Revenue: Rose 12.3% to $95.4 million from the year earlier quarter.

Actual vs. Wall St. Expectations: DRIV reported adjusted net income of 32 cents per share. By that measure, the company beat the mean estimate of 13 cents per share. Analysts were expecting revenue of $94 million.

Quoting Management: “We delivered good results in the third quarter, with revenue increasing over 12 percent from last year, and continue to see solid performance across our enterprise commerce business,” said Joel Ronning, Digital River’s CEO. “While we have tempered our fourth quarter guidance due to the softening in the economy, we remain confident in our global cloud commerce strategy. During the last decade, we’ve developed an international footprint second to none in the industry. Our global reach, combined with a proven payments solution and world class marketing services will continue to drive our revenue going forward.”

Key Stats:

The company has now topped analyst estimates for the last three quarters. It beat the mark by one cent in the second quarter and by 4 cents in the first quarter.

The company’s revenue has now risen for two straight quarters. In the second quarter, revenue increased 13.1% to $92.5 million from the year earlier quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from 32 cents a share to 28 cents over the last ninety days. At 68 cents per share, the average estimate for the fiscal year has fallen from 76 cents ninety days ago.

Competitors to Watch: Microsoft Corporation (NASDAQ:MSFT), Akamai Technologies, Inc. (NASDAQ:AKAM), EasyLink Services Intl. Corp. (NASDAQ:ESIC), PFSweb, Inc. (NASDAQ:PFSW), eBay Inc. (NASDAQ:EBAY), GSI Commerce, Inc. (NASDAQ:GSIC), Oracle Corporation (NASDAQ:ORCL), Premiere Global Services, Inc. (NYSE:PGI), Tier Technologies, Inc. (NASDAQ:TIER), and Symantec Corporation (NASDAQ:SYMC).

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(Source: Xignite Financials)