With all the other goings-on at data-collection company infoUSA
At least two investment funds, Cardinal Capital Management and Dolphin Limited Partnership, together controlling approximately 7.3% of infoUSA's shares, are demanding access to internal corporate documents at infoUSA. The funds want to investigate infoUSA CEO Vinod Gupta's compensation, various related-party transactions that the firm has entered into, and the strange circumstances surrounding Gupta's abortive attempt to take the company private back in August, among other issues. With all this controversy, a wonder that infoUSA management has time left to run its business.
They'd best find a way, though. Controversy aside, analysts are expecting very good things out of infoUSA tomorrow. Between the two analysts who follow the company, the consensus is that infoUSA will post $94 million in sales this quarter, and translate that into $0.13 per share in profits. Transforming 5% sales growth into 30% earnings growth would be tricky any time. Doing so in the midst of a battle with shareholders will be quite a feat.
Worse for infoUSA shareholders, the company has developed a history of beating estimates, so accomplishing that 5%-into-30% feat still may not give this stock a bounce. Over each of the past four quarters, infoUSA served up a positive "earnings surprise" to Wall Street, beating estimates by an average of 19%. Assuming Wall Street has a similar "whisper number" baked into its expectations for Tuesday's report, even meeting estimates may not meet the Street's real expectations.
Whatever tomorrow's earnings results show, however, the real story behind infoUSA is not in the GAAP numbers at all. Over the past eight quarters, infoUSA has booked just $41.4 million in GAAP profits. But its free cash flow is nearly three times as large, at $118.8 million. For comparison, rival Acxiom
For a more on infoUSA's boardroom battles, read:
- Coup du Jour at infoUSA
- infoUSA Board Develops Backbone
- Management Wants to Buy American
- An Acxiomatic Bargain
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Fool contributor Rich Smith does not own shares of any company named above.