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Foolish Forecast: aQuantive Goes Out in Style

http://www.fool.com/investing/high-growth/2007/08/07/foolish-forecast-aquantive-goes-out-in-style.aspx

Anders Bylund
August 7, 2007

Thursday morning, we get to spend some quality time with aQuantive (Nasdaq: AQNT  ) , as the digital marketing expert reports second-quarter earnings. Maybe that's quantity time? No matter -- we've geared up the quantum mechanics engine to give you the lowdown on what to expect.

What analysts say:

  • Buy, sell, or waffle? Twenty-one firms follow aQuantive, and they seem pretty happy with the share price today. Three analysts have a buy rating on the stock, one wants to sell, and the otherĀ 17 have placed it on hold.
  • Revenues. $152.8 million would satisfy the average analyst, which is a 44.6% increase from last year's $105.6 million. Management guidance points to a range between $148 million and $153 million.
  • Earnings. The consensus forecast says $0.16 per share, not far from the year-ago $0.15 per-share performance. The company expects $13 million to $14.5 million, which translates into a $0.16-$0.18 range per share.

What management does:
What we have here is a stable margins framework supporting breathless growth ratios. It's a beautiful thing, and any software Brobdingnagian would be proud to fold these numbers into its own. I'm getting ahead of myself -- do read on.

Margins

12/2005

3/2006

6/2006

9/2006

12/2006

3/2007

Gross

41.4%

40.8%

41.3%

41.1%

40.8%

40.6%

Operating

19.8%

19.6%

20.7%

21.1%

21.4%

20.8%

Net

11.4%

10.8%

11.3%

11.4%

12.2%

12.3%

Y-O-Y Growth

12/2005

3/2006

6/2006

9/2006

12/2006

3/2007

Revenue

95.3%

67.6%

45.8%

40.7%

43.4%

46.8%

Earnings

(18%)

(19.4%)

(9.8%)

46.9%

53.4%

66.5%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
This should be the last quarterly report we get from a standalone aQuantive, as mighty Microsoft (Nasdaq: MSFT  ) has offered to buy the company wholesale for about $6 billion. That's assuming that a shareholder vote held on the day of this report passes, but with an 85% price premium over the share price on the day of that announcement, it's hard to see this as anything but a formality.

You might ask yourself why the Redmond behemoth went for aQuantive rather than Right Media or DoubleClick. Yahoo! (Nasdaq: