Digital River Inc. Earnings: Profit Down but Still Beats Estimates

Digital River Inc. (NASDAQ:DRIV) posted lower net income in the fourth quarter compared with a year-earlier period. Digital River provides end-to-end global e-commerce and marketing solutions to a variety of companies in software, consumer electronics, computer games, video games, and other markets.

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Digital River Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Digital River Inc. fell to $4.3 million (12 cents per share) vs. $5.4 million (14 cents per share) a year earlier. This is a decline of 19.5% from the year earlier quarter.

Revenue: Rose 14.7% to $112 million from the year earlier quarter.

Actual vs. Wall St. Expectations: Digital River Inc. reported adjusted net income of 45 cents per share. By that measure, the company beat the mean estimate of 23 cents per share. It beat the average revenue estimate of $104.5 million.

Quoting Management: “I am pleased to report that we ended 2011 on a high note, delivering the highest quarterly revenue in the history of the company and beating our fourth quarter non-GAAP earnings guidance,” said Joel Ronning, Digital River’s CEO. “This year, innovation and product development will be major themes inside Digital River. We have several solutions we intend to deliver in 2012, including an expanded cloud-based subscriptions offering. Our company and clients’ goals are clearly aligned – we are both focused on growing online revenue.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 6 cents in the third quarter, by one cent in the second quarter, and by 4 cents in the first quarter.

Revenue has now gone up for three straight quarters. In the third quarter, revenue rose 12.3% to $95.4 million while the figure rose 13.1% in the second quarter from the year earlier.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved down from 22 cents a share to 20 cents over the last ninety days. The average estimate hasn’t changed from 61 cents per share for the fiscal year.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com