Internet fax and messaging-services provider j2 Global (Nasdaq: JCOM) will annouce fourth-quarter results after today's market close. Here's what's on tap for the company.

What analysts say:

  • Buy, sell, or waffle? Of the 10 analysts following j2 Global, seven want to buy the stock, while three say "hold." In our Motley Fool CAPS investor database, 300 of our 83,000-plus users have weighed in on j2 Global, collectively giving the company a solid four-star rating.
  • Revenue. Analysts' average estimate for third-quarter revenue lands at $56.8 million, 16% ahead of the same period last year.
  • Earnings. The analyst pool, on average, is expecting earnings of $0.36 per share.

What management says:
j2 Global management continues to see upside ahead, but investors have been in a downside mood since last quarter's earnings. The stock has dropped nearly 40% since early November, when the company noted that some macroeconomic forces affected results. Co-president Scott Turicchi noted that the last period "was a difficult quarter for our credit-sensitive customers which resulted in their having lower usage levels versus prior periods."

Turicchi is saying essentially the same thing that AT&T (NYSE: T) noted early in 2008: Customers that have been affected by the housing and credit turmoil aren't spending as much on services.

What management does:
Despite usage drops in particular customer segments, recent price increases rolled out across the entire customer base have propped up margins.

Margins

6/06

9/06

12/06

3/07

6/07

9/07

Gross

78.7%

78.9%

79.7%

80%

80.5%

80.7%

Operating

40.3%

38.2%

36.5%

37%

37.7%

38.5%

Net

33.4%

28.8%

29.3%

29.6%

30.1%

31.2%

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:
Maybe Verizon Communications (NYSE: VZ) is large enough that some economic softness doesn't materially impact the company, since it stated it has seen no effect yet. j2 Global, though, is still a small fish in the massive telecommunications pond, and investors are obviously worried about the effects of a softening economy on revenue.

But j2 Global's offerings -- like alternative communication solutions such as Vonage (NYSE: VG) and eBay's (Nasdaq: EBAY) Skype -- tend to be more attractive when times are tight. This doesn't necessarily mean that j2 Global won't continue to see growth stagnate depending upon its level of exposure to certain customer segments. Still, I'd be interested to see whether there's a net benefit to j2 Global this year. Fewer small businesses will be likely to drop hundreds of dollars for that new Hewlett-Packard or Brother fax machine; they may well opt for the j2's eFax service instead.

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Fool contributor Dave Mock routinely makes lemonade from lemons. What else would you do with them? He owns no shares of companies mentioned here. Dave is the author of The Qualcomm Equation. j2 Global is a Pay Dirt recommendation. The Fool's disclosure policy didn't skip a beat during the writers' strike.