Digital River Inc. Earnings: Profit Drops, Beats Estimates

Digital River Inc. (NASDAQ:DRIV) posted lower net income in the first quarter compared with a year-earlier period. 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 First Quarter

Results: Net income for Digital River Inc.  fell to $4.7 million (14 cents per share) vs. $7 million (18 cents per share) a year earlier. This is a decline of 32.5% from the year-earlier quarter.

Revenue: Rose 4.3% to $102.4 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Digital River Inc.  reported adjusted net income of 30 cents per share. By that measure, the company beat the mean estimate of 19 cents per share. It beat the average revenue estimate of $100.2 million.

Quoting Management: “We’re pleased with our results in the quarter, beating our revenue target and coming in at the top-end of our earnings range,” said Joel Ronning, Digital River’s CEO. “While we are maintaining a slightly cautious outlook on the European economy, we continue to invest for the future, developing some great products in cloud-based subscriptions and building out our catalog of APIs to simplify the process of onboarding new clients. Our mission is to continually strengthen our position as the revenue growth experts in global cloud commerce.”

Key Stats:
The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 15 cents in the fourth quarter of the last fiscal year, by 6 cents in the third quarter of the last fiscal year, and by one cent in the second quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 14.7% to $112 million in the fourth quarter of the last fiscal year. The figure rose 12.3% in the third quarter of the last fiscal year from the year earlier and climbed 13.1% in the second quarter of the last fiscal year from the year-ago quarter.

Looking Forward: Expectations for the company’s next-quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the second quarter has risen to 12 cents per share from 7 cents. The average estimate for the fiscal year is 81 cents per share, a rise from 76 cents ninety days ago.

Competitors to Watch: Microsoft Corporation, Akamai Technologies, Inc., EasyLink Services Intl. Corp., PFSweb, Inc., eBay Inc., GSI Commerce, Inc., Oracle Corporation, Premiere Global Services, Inc., Tier Technologies, Inc., and Symantec Corporation.

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

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