The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Digital River beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share shrank to a loss.
Margins shrank across the board.
Digital River reported revenue of $91.7 million. The 10 analysts polled by S&P Capital IQ looked for net sales of $89.3 million on the same basis. GAAP reported sales were 3.9% lower than the prior-year quarter's $95.4 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.20. The 11 earnings estimates compiled by S&P Capital IQ anticipated $0.15 per share. GAAP EPS were -$0.02 for Q3 versus $0.15 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 82.1%, 150 basis points worse than the prior-year quarter. Operating margin was 0.7%, 430 basis points worse than the prior-year quarter. Net margin was -0.8%, 660 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $101.2 million. On the bottom line, the average EPS estimate is $0.36.
Next year's average estimate for revenue is $383.9 million. The average EPS estimate is $1.01.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 303 members out of 337 rating the stock outperform, and 34 members rating it underperform. Among 86 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 80 give Digital River a green thumbs-up, and six give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Digital River is hold, with an average price target of $18.25.
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