J2 Global (JCOM) Q3 Earnings Beat Estimates; Dividend Up

Los Angeles, CA-based j2 Global, Inc.’s (NASDAQ:JCOM) third-quarter 2016 earnings (on an adjusted basis) of $1.19 per share (including stock-based compensation expenses) beat the Zacks Consensus Estimate by a penny. Also, earnings increased around 16.67% on a year-over-year basis.

Quarterly revenues came in at $210.1 million, up 17.6% year over year. The top line, however, missed the Zacks Consensus Estimate of $213 million. Segment-wise, total Cloud Service revenues grew13.5% to $142.2 million in the reported quarter. Digital Media revenues came in at $66.8 million, up 27.7%. IP Licensing revenues remained flat year over year at $1.1 million in the third quarter.

j2 Global posted quarterly operating expenses of $111million in the quarter under review, up 20.3% from the year-ago quarter. Quarterly EBITDA (on an adjusted basis) climbed 13.2% year over year to $95.4 million.

j2 Global exited the third quarter with approximately $285.6 million in cash and cash equivalents compared with $255.5 million at the end of 2015. Long-term debt at the end of the reported quarter was $599.3 million compared with $592 million at the end of 2015. Free cash flow, at the end of the first three quarters of the year, declined 20.6% year over year to $177.2 million.

Dividend Increased

In a shareholder friendly move, the company’s board of directors declared a 2.9% increase in its quarterly dividend. The company will now pay a dividend of 35.5 cents per share. This marks the 21^st successive quarterly dividend hike. The payment will be made on Dec 5, to shareholders on record as of Nov 18, 2016.

2016 View Reiterated

The Zacks Rank #3 (Hold) companymaintained its revenue guidance at the band of $830 million to $860 million for 2016. Earnings (on an adjusted basis) projection has been reiterated in the range of $4.70–$5.00 per share. The Zacks Consensus Estimate for 2016 earnings is pegged at $4.68 per share on revenues of $854.2 million. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company continues to put in efforts to boost its operational performance despite increasing competition from peers likeApigee Corp (NASDAQ:APIC) , Atlassian Corporation Plc (NASDAQ:TEAM) , and Box, Inc. (NYSE:BOX) .

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