The 10-second takeaway
For the quarter ended Dec. 31 (Q4), 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 dropped across the board.
Digital River tallied revenue of $101.3 million. The seven analysts polled by S&P Capital IQ expected revenue of $98.2 million on the same basis. GAAP reported sales were 9.5% lower than the prior-year quarter's $112.0 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 $0.31. The eight earnings estimates compiled by S&P Capital IQ predicted $0.28 per share. GAAP EPS were -$6.11 for Q4 compared to $0.12 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 82.8%, 280 basis points worse than the prior-year quarter. Operating margin was -0.3%, 1,390 basis points worse than the prior-year quarter. Net margin was -197.4%, 20,130 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $98.0 million. On the bottom line, the average EPS estimate is $0.25.
Next year's average estimate for revenue is $380.0 million. The average EPS estimate is $0.91.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 300 members out of 332 rating the stock outperform, and 32 members rating it underperform. Among 80 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 75 give Digital River a green thumbs-up, and five 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 $16.00.
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