Why AVG Technologies Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of AVG Technologies (NYSE: AVG  ) have popped today by upwards of 13% on the heels of an upbeat earnings release and cheery guidance.

So what: The anti-virus-software maker posted first-quarter revenue of $83 million, with adjusted net income of $18.2 million, or $0.34 per share. Analysts would have been happy with just $76.7 million in sales. CEO J.R. Smith said the company grew its user base and increased revenue per average active user, while bolstering its product portfolio.

Now what: The majority of growth was driven by its platform-derived segment, with sales more than doubling to $36.4 million, while subscription revenue only grew by 8% to $46.6 million. Second-quarter guidance expects revenue to be between $80 million and $82 million, with adjusted earnings per share in the range of $0.26-$0.28. AVG is raising its full-year forecast, with fiscal 2012 sales expected to be in the range of $327 million-$335 million, up from the prior range of $317 million-$325 million. The company's profit forecast was also bumped up and adjusted net income is now expected between $60 million and $63 million.

Interested in more info on AVG Technologies? Add it to your watchlist by clicking here.

Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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  • Report this Comment On May 11, 2012, at 3:57 PM, ckensek wrote:

    You should also mention that Q1 net income dropped from 2011 to 2012, from $18 million to $11 million. Net cash provided by operating activities dropped from $29 million to $21 million, in Q1, year over year.

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