United Online Beats on Both Top and Bottom Lines

United Online (Nasdaq: UNTD  ) reported earnings on Nov. 1. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), United Online beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank slightly and GAAP earnings per share dropped significantly.

Margins contracted across the board.

Revenue details
United Online reported revenue of $177.8 million. The two analysts polled by S&P Capital IQ anticipated a top line of $173.8 million on the same basis. GAAP reported sales were 2.7% lower than the prior-year quarter's $182.7 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.14. The two earnings estimates compiled by S&P Capital IQ averaged $0.11 per share. GAAP EPS of $0.05 for Q3 were 62% lower than the prior-year quarter's $0.13 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 49.7%, 500 basis points worse than the prior-year quarter. Operating margin was 4.0%, 690 basis points worse than the prior-year quarter. Net margin was 2.8%, 370 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $211.3 million. On the bottom line, the average EPS estimate is $0.14.

Next year's average estimate for revenue is $859.7 million. The average EPS estimate is $0.64.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 258 members out of 281 rating the stock outperform, and 23 members rating it underperform. Among 54 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 44 give United Online a green thumbs-up, and 10 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on United Online is buy, with an average price target of $7.07.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of United Online. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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