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

ReachLocal, Inc. (NASDAQ:RLOC) had a loss and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 2.54%.

ReachLocal, Inc. Earnings Cheat Sheet

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

Revenue: Rose 13.27% to $127.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: ReachLocal, Inc. reported adjusted EPS loss of $0.01 per share. By that measure, the company beat the mean analyst estimate of $-0.03. It beat the average revenue estimate of $124.87 million.

Quoting Management: “We had a solid second quarter driven by improvement in our North American operations and strong international growth of 41% on a constant currency basis,” said Zorik Gordon, Chief Executive Officer. “We also made significant progress on our product initiatives in the quarter, including the launch of a second ClubLocal market in San Francisco, the successful completion of the ReachEdge beta test, the beta release of ReachCommerce in three markets, as well as our recently announced deal to power home service bookings on Yelp.”

Key Stats (on next page)…

Revenue increased 4.33% from $121.82 million in the previous quarter. EPS increased to $-0.01 in the quarter versus EPS of $-0.02 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.03 and has not changed. For the current year, the average estimate has moved down from a profit of $0.04 to a profit of $0.01 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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