DG FastChannel Inc.

DG FastChannel Inc (DGIT) has just announced a "breakout" quarter and estimates have popped. Shares are also showing upward momentum for the media company.

Company Description

DG FastChannel provides innovative, technology-based solutions to help advertisers and agencies work faster, smarter and more competitively. DG FastChannel delivers the standard in digital media services to the advertising, broadcast and publishing industries.

The Company utilizes satellite and Internet transmission technologies and has deployed a suite of digital media intelligence and asset management tools designed specifically for the advertising industry, including creative and production resources, broadcast verification, and digital asset management.

Revenues Up 68%

On Feb 12 DG FastChannel reported fourth-quarter results which included revenue of $52 million. Revenue for the quarter was up 68% year-over-year compared to $31 million last year.

Net income was $5.5 million, up from $3.7 million in 2007. The figure yielded earnings per share of 26 cents, up from 21 cents in the same period last year.

A Breakout Year

CEO Scott Ginsburg said, "2008 was a breakout year of growth and development for DG FastChannel. The Company’s impressive results were driven by our primary growth engine, the delivery of high definition (HD) content."

After citing key acquisitions he continued, "robust growth in key benchmarks such as revenue, adjusted EBITDA, and net income are all the more exceptional given the current economic environment and demonstrate the successful execution of our long-term strategic plan."

Estimates Are Climbing

Since the announcement earnings estimates for full-year 2009 have rose to 79 cents from 73 cents. The consensus for 2010 jumped to $1.28 from $1.09. While this year's number does call for a 23% decline, next year's earnings would be a 62% growth.

The Surprises Keep Coming

The latest earnings announcement was a double the 13 cents expected by Wall Street, making it the eighth surprise in the past 2 years. The last 4 surprises have averaged more than 52%.

The Chart

Shares of DGIT are showing some upward momentum and continue to pressure a key resistance level. Take a look at the chart below.

Read the full analyst report on DGIT