Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of marketing consulting firm Constant Contact
So what: For the quarter, Constant Contact added 45,000 paying customers and reported a 20% increase in revenue to $59.9 million. It also reversed a year-ago loss and reported an adjusted profit of $0.09 per share. This was good -- just not good enough! Wall Street had been expecting the company to earn $0.10 a share on sales of $59.4 million. What's undeniably bad is the $0.14-$0.15 in EPS that Constant Contact is forecasting for the second quarter, considering that the Street had been looking for $0.19. Revenue forecasts, however, met the consensus estimates.
Now what: Today's guidance is confusing to say the least, as the company has been adding customers and increasing its average revenue per user -- a key metric for a marketing firm like Constant Contact. It's very hard to say if this is merely a hiccup in the company's growth or a changing of the wind. As of now, I'm inclined to believe it's just a hiccup, but following the huge run that the stock has had since last summer, I'm perfectly fine waiting it out another quarter or two to see if Constant Contact can find its swagger again.
Craving more input? Start by adding Constant Contact to your free and personalized watchlist so you can keep up on the latest news with the company.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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