J2 Global shares rise as subscriber revenue boosts 1Q profit
NEW YORK—Shares of e-mail, fax and voice-mail company J2 Global Communications Inc. rose Wednesday on the company's first-quarter results, which saw a sharp rise in subscriber revenue.
Net profit rose 2.4 percent to $16.8 million, or 35 cents per share, compared with $16.4 million, or 32 cents per share, in the 2007 first quarter.
Sales rose 8 percent to $58.6 million compared with $54.2 million last year.
Subscriber revenue rose 13.8 percent to $57.2 million.
BMO Capital Markets analyst Steven Freitas said J2 had excellent execution in a challenging environment.
Freitas even saw some signs of recovery from customers in the lending and mortgage industries, which are a significant J2 business segment.
Lending and mortgage fax volumes grew modestly quarter-over-quarter following three consecutive quarters of sequential revenue decline, he said.
"The revenue growth from J2's credit sensitive customers was encouraging and gives us more confidence that its guidance is achievable," Freitas added.
He raised his 2008 earnings per share estimate to $1.62 from $1.60 and initiated a 2009 earnings-per-share estimate of $1.90.
Friedman, Billings, Ramsey analyst Daniel Ives remained positive on the company but was less optimistic.
"While we remain fans of the J2 Global story over the long term, we remain on the sidelines until we can get more comfort around the company's organic growth rate for 2008 and beyond," he said.
He maintained his "Market Perform" rating and $24 price target. The price target represents an 11 percent premium on Wednesday afternoon's trading price.
Shares in the Hollywood, Calif.-based company rose 38 cents, or 1.8 percent, to $21.48.
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