Vocus' 4Q EPS Upsets, Revs Up Y/Y - Analyst Blog
06 Febbraio 2013 - 1:10PM
Zacks
Vocus Inc. (VOCS)
reported fourth quarter 2012 adjusted earnings of 1 cent, missing
the Zacks Consensus Estimate by 2 cents.
Revenues
Revenues of $47.1 million in the fourth quarter increased 54.4%
from $30.5 million generated in the year-ago quarter. The favorable
outcome was backed by customer additions, strong demand growth from
existing customers and improved product adoption. The top line
however missed the company’s guided range of $47.2 million to $47.6
million.
Customers
Vocus added 1,363 new subscribers during the fourth quarter
compared with 1,052 in the year-earlier quarter. Total active
subscribers were 16,494 at quarter end. A healthy mix of customers
across organizations, geographic areas and industries was also
noticed.
The company signed a host of subscription agreements with new and
existing customers. Notable among these are the agreements with
British Airways, Center Stage Productions, Colchester Zoo, Farmers
Insurance, Gentle Giant Moving, Harlem Globetrotters, Lasio,
Make-A-Wish Foundation of America, McGladrey, My Stuff Lost and
Found, PEZ Candy, The Pasadena Playhouse, Trinity Broadcast Network
and Wyndham Worldwide.
Operating Results
Gross margin was 81.3%, marginally up from 81.2% in the year-ago
quarter. Operating loss was $3.2 million compared to operating
income of $0.4 million in the year-ago quarter. The operating loss
can be traced back to a 70.4% year-over-year rise in operating
expenses, which offset the 54.4% revenue growth. Operating expenses
increased due to growth in direct sales capacity.
Net loss on a GAAP basis was $3.7 million or 19 cents per share
compared with a net loss of $11.8 million or 63 cents in the fourth
quarter of 2011. Excluding one-time items, but including
stock-based compensation expense, net profit was $0.15 million or 1
cent per share compared with a net income of $1.36 million or 7
cents in the year-earlier period.
Balance Sheet & Cash Flow
Vocus exited the quarter with $32.8 million in cash and short-term
investments versus $30.6 million in the previous quarter. Accounts
receivables were $29.8 million compared with $18.9 million in the
previous quarter. The company generated $7.6 million in cash from
operations compared with $4.2 million in the previous quarter.
Guidance
For the first quarter of 2013, revenues are expected in a range of
$46.3 million to $46.7 million. The company expects non-GAAP EPS to
be 9 cents to 10 cents on an estimated non-GAAP weighted average of
24.9 million diluted shares outstanding and projected tax provision
of $550,000. GAAP loss per share is expected between 26 cents and
25 cents.
For full year 2013, revenue is estimated between $200.3 million and
$201.8 million. Non-GAAP EPS is estimated in a range of 50–53
cents. Including one-time adjustments of $1.24 per share, GAAP loss
per share is expected to be in the range of 74–71 cents. The
company expects free cash flow in the range of $24.5 million to
$25.5 million. Capital expenditures are projected at $6.5
million.
Apart from this, the company is optimistic about the launch of a
new version of its marketing suite. Vocus expects that the enhanced
features offered through the new version will likely attract
buyers, which could boost its billings growth by 20.0% in 2013.
To Conclude
Though Vocus posted a GAAP loss in the fourth quarter, the company
reported non-GAAP EPS of a penny, which came below the Zacks
Consensus Estimate. But, Vocus generated solid year-on-year revenue
growth. The company benefited from the high revenue generation
ability of its new marketing suite.
Vocus exists in a nascent market and anticipates good growth
prospects. In the absence of any real competition, the company has
been able to steadily expand its customer base. The company has
also successfully capitalized on strategic acquisitions. By
leveraging iContact’s capabilities and increasing the sales team to
target small and medium sized businesses (SMBs), Vocus is eyeing
cloud-space opportunities in the SMBs. However, there remains a
concern related to margin contraction based on higher investments
in sales and marketing as well as acquisitions.
Currently, Vocus has a Zacks Rank #3 (Hold).
We recommend investors to also consider other software stocks that
are performing well and are worth buying. Symantec
Corp. (SYMC) and Compuware Corp. (CPWR)
have a Zacks Rank #1 (Strong Buy), while CA Inc.
(CA) has a Zacks Rank #2 (Buy).
CA INC (CA): Free Stock Analysis Report
COMPUWARE CORP (CPWR): Free Stock Analysis Report
SYMANTEC CORP (SYMC): Free Stock Analysis Report
VOCUS INC (VOCS): Free Stock Analysis Report
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