EarthLink Earnings: Here’s Why Investors Don’t Like These Results

EarthLink Inc. (NASDAQ:ELNK) had a loss and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 6.22%.

EarthLink Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased to $-0.11 in the quarter versus EPS of $-0.01 in the year-earlier quarter.

Revenue: Decreased 7.33% to $313.4 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: EarthLink Inc. reported adjusted EPS loss of $0.11 per share. By that measure, the company missed the mean analyst estimate of $-0.06. It missed the average revenue estimate of $314.76 million.

Quoting Management: “In the second quarter of 2013, we continued to see increased demand in the marketplace for our growth products. Our sales force delivered significantly higher productivity, higher sales in aggregate, a richer mix of growth products and materially higher average revenue per sale,” said EarthLink Chairman and Chief Executive Officer Rolla P. Huff.

Key Stats (on next page)…

Revenue decreased 2.07% from $320.02 million in the previous quarter. EPS decreased to $-0.11 in the quarter versus EPS of $-2.30 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a loss of $0.1 to a loss $0.08. For the current year, the average estimate has moved down from a loss of $0.65 to a loss of $2.56 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. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

More Articles About:   , , ,  

More from The Cheat Sheet