Could Millennial Media Be The Next Big Mobile Acquisition Play?

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The digital mobile advertising company Millennial Media (NYSE:MM) reported earnings on Wednesday that saw the company top analyst estimates for earnings per share, but miss on revenue, with shares plummeting over 37 percent during trading on Thursday in response. Meanwhile, investors supported the stock on Friday to help it land in the green.

The company reported that revenue increased to $72.6 million from $49.4 million a year ago, which reflects a growth of 46.9 percent. Analysts had been expecting figures closer to $75.5 million, according to analyst estimates from Business Insider. The company posted a loss of 12 cents a share versus the 5 cent loss seen in the first quarter of 2013 and the analyst expectation that the company would lose 10 cents a share. The net loss for Millennial Media was $12.9 million.

Poor guidance didn’t help the company, which predicted that its revenue for the second quarter would be between $70 million and $75 million while earnings would be a loss of between $5 million and $6 million. Business Insider said that analysts forecast the company would make $96.4 million next quarter, putting Millennial’s own predictions $20 million below what analysts were looking for.

The company’s CEO Michael Barrett is only in his first quarter as head of the company, entering a familiar world with digital and mobile advertising efforts from industry dominators Google (NASDAQ:GOOG) (NASDAQ:GOOGL), Facebook (NASDAQ:FB) and Yahoo (YHOO). “While I would liked to have seen stronger performance in the quarter, we have developed an aggressive strategy and I have high confidence that we can execute and capitalize on the growth and promise of mobile,” Barrett said in the earnings release.

Aside from the results and the fact that the stock closed at $3.36 on Thursday afternoon, the company also announced that its CFO Michael Avon would be leaving the company “to pursue other career interests.” The lack of a CFO was also a catalyst for short-term uncertainty, but if the company plays its cards right can be a win down the road with a proven candidate for the job.

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