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Internet services provider J2 Global Communications (NASDAQ: JCOM ) offers cloud and digital media services in 49 countries and is ready to extend its reach even further. There are several reasons that investors should feel optimistic about J2 Global's stock and the company's future earnings potential.
J2 Global's fourth-quarter earnings
In the final three months of 2013, J2 Global's revenue jumped to $138 million, up from $102 million during the same timeframe in 2012. J2 Global also saw its quarterly EBIDTA, GAAP earnings per diluted share, and free cash flow increase in the fourth quarter of last year.
Meanwhile, some of J2 Global's chief rivals lost money in 2013. Sprint (NYSE: S ) suffered $1.9 billion in combined annual operating losses last year. In addition, some analysts expect Verizon Communications (NYSE: VZ ) to cut prices soon due to increased competition, which could limit this company's earnings potential going forward.
Improved 2014 revenue projections
J2 Global has set lofty goals for 2014, which could make the stock a big winner for investors. This year, J2 Global anticipates revenue will increase more than 11% from $580 million to $600 million, and its shareholders could profit if the company even comes close to achieving this milestone.
To boost revenue, J2 Global is unveiling new releases that will help clients stay in touch with one another from any location, at any time. In January, J2 Global launched an e-fax mobile app that enables users to sign a fax from any Android and iOS device with a single finger swipe. Mike Pugh, Vice President of marketing for J2 Global, recently acknowledged that his company provides world-class communications support to clients, and will continue to do so in the near future.
"We are committed to continually expanding the functionality of our e-fax mobile apps based on feedback from mobile professionals," Pugh added. "What we constantly hear is that entrepreneurs today are doing business everywhere, and need cloud services to support them wherever they are."
More mobile service data revenue
According to Reuters, mobile data service revenue in the U.S. reached $90 billion last year, and several technology experts project this figure to hit $100 billion in 2014. If these experts are correct, J2 Global's stock prices could rise accordingly, especially if more business owners take advantage of this company's e-fax and Campaigner cloud services.
J2 Global shareholders should expect the company's profits to rise over the next few years as well. A Cisco Systems report released in January revealed that by 2018, U.S. consumers will upload more data on smartphones than they did on laptops in 2013. If more people use smartphones for data uploads, J2 Global could attract more customers, resulting in substantial profits for years to come.
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