Digital River Inc. Third Quarter Earnings Sneak Peek

Digital River, Inc. (NASDAQ:DRIV) will unveil its latest earnings on Thursday, October 27, 2011. 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.

Digital River, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 13 cents per share, a decline of 7.1% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 18 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 13 cents during the last month. Analysts are projecting profit to rise by 36% versus last year to 68 cents.

Past Earnings Performance: The company is looking to beat analyst estimates for the third quarter in a row. Last quarter, it beat estimates with profit of 5 cents per share against the mean estimate of 4 cents. In the prior quarter, the company reported net income of 24 cents.

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Wall St. Revenue Expectations: On average, analysts predict $94 million in revenue this quarter, a rise of 10.6% from the year ago quarter. Analysts are forecasting total revenue of $392.4 million for the year, a rise of 8% from last year’s revenue of $363.2 million.

Analyst Ratings: Analysts seem relatively indifferent about Digital River with eight of 15 analysts surveyed maintaining a hold rating.

A Look Back: In the second quarter, the company swung to a profit of $291,000 (one cent a share) from a loss of $2.5 million (7 cents) a year earlier, beating analyst estimates. Revenue rose 13.1% to $92.5 million from $81.8 million.

Key Stats:

A year-over-year revenue increase in the second quarter snapped a streak of three consecutive quarters of revenue declines. Revenue fell 0.5% in the first quarter, 6.8% in the fourth quarter of the last fiscal year and 14.5% in the third quarter of the last fiscal year.

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).

Stock Price Performance: During July 28, 2011 to October 21, 2011, the stock price had fallen $8.49 (-28.1%) from $30.22 to $21.73. The stock price saw one of its best stretches over the last year between January 28, 2011 and February 10, 2011 when shares rose for 10-straight days, rising 15.6% (+$4.79) over that span. It saw one of its worst periods between April 6, 2011 and April 20, 2011 when shares fell for 11-straight days, falling 9.2% (-$3.53) over that span. Shares are down $12.69 (-36.9%) year to date.

(Source: Xignite Financials)

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