Over the past few weeks, shares in e-commerce outsource provider DigitalRiver
So while the stock had peeled back from its highs, it appears the business has been doing just fine, thank you.
Digital River released record earnings and profits yesterday, reporting revenues of $48 million in the fourth quarter, or 77% over last year, and GAAP net income of $12.8 million, or $0.33 a share, more than double last year's performance. It also beat analyst estimates of $42.6 million and $0.27 a share, respectively. On a pro forma basis, Digital River's earnings came in at $0.43 a share, also well ahead of expectations. It's the fifth straight quarter that the company has beat estimates.
Digital River builds and personalizes customer websites. It hosts their websites and services their transactions, from order taking and order fulfillment to fraud protection, security, customer service, and integration with back-end systems. Rumors have also swirled that it was working with Apple
It's certainly a turn of events for a company that, though surviving the dot-com implosion, ended up losing a high-profile contract with Major League Baseball. Since then, however, the company has been adding clients and currently has more than 36,000 customers and partners. Digital River reported having $292 million in cash and $195 million in long-term debt in the form of convertible senior notes. While it did not release a cash flow statement, last quarter it was generating more than $11 million in owner's earnings.
There's a lot to like about Digital River going forward. It competes in some broad areas against the likes of Electronic Data Systems
Digital River raised guidance for 2005 to $195 million, up from its previous forecast of $188 million, with GAAP earnings of $0.93 per share, so it looks like the company is sailing on a river of growing profits and opportunity.
See also: "Apple Sailing on Digital River"
Fool contributor Rich Duprey once almost steered a sailboat into the Verrazano Narrows Bridge in Brooklyn. He owns shares in Digital River but does not own any of the other stocks mentioned in this article. Talk about Digital River on our discussion boards (free trial required).