Yesterday, after the closing bell, ,j2 Global Inc. (JCOM - Analyst Report) reported excellent fourth-quarter 2012 financial results, with record high quarterly revenue, earnings per share, EBITDA, and churn rate. Management seems more confident about 2013 as it has provided a strong financial outlook.
Additionally, the board of directors of j2 Global has increased its quarterly dividend by 3.3% sequentially from 22.5 cents per share to 23.25 cents per share, maintaining its streak of dividend increases for six consecutive quarters. The new dividend rate implies a 10.7% increase compared with the first dividend paid by j2 Global in September 2011. Further, the board has extended its one-year 5 million share repurchase program set to expire on Feb 20, 2013, by one more year.
Quarterly GAAP net income came in at $30.2 million or 65 cents per share compared with $29.8 million or 62 cents per share in the year-ago quarter. Fourth-quarter adjusted earnings per share of 66 cents were well above the Zacks Consensus Estimate of 58 cents. Quarterly, total revenue was approximately $102 million, up 19.9% year over year, easily beating the Zacks Consensus Estimate of $90 million.
j2 Global posted quarterly gross margin of 81.7% compared with 82.8% in the year-ago quarter. Operating expenses in the reported quarter were $41.1 million compared with $31.9 million in the prior-year quarter. Quarterly operating margin was 41.4% compared with 45.2% in the comparable quarter last year. Churn rate, in the fourth quarter of 2012, was at a record low of 2.2%.
In the fourth quarter of 2012, j2 Global generated $46.4 million of cash from operations compared with $41.5 million in the year-ago quarter. Free cash flow, in the reported quarter was $45.2 million compared with $40.1 million in the prior-year quarter. At the end of fiscal 2012, j2 Global had around $343.6 million in cash & marketable securities on its balance sheet compared with $221 million at the end of 2011. At the end of fiscal 2012, the company had $245.2 million of debt and the debt-to-capitalization ratio was 0.29.
For fiscal 2013, management expects total revenue in the range of $500 - $525 million, while non-GAAP EPS is expected to be within the range of $2.65 - $2.85. Non-GAAP effective tax rate is estimated in the range of 25 - 27%.
Other Stocks to Consider
j2 Global currently has a Zacks Rank #3 (Hold). Besides j2 Global, other stocks in the Internet/Application software industry that are currently performing well include Open Text Corp. , Commtouch Software Ltd. and Constant Contact Inc. . While Open Text currently has a Zacks Rank #2 (Buy), both Commtouch and Constant Contact have a Zacks Rank #3 (Hold).