- Revenue still grew 3% Y/Y to $60.4 million (including small acquisition)
- j2 Global's gross margin improved to 81.1% from 80.2% in 1Q08 and its operating margin was 43.8% versus 38.4% in the year ago period as the company shows continued operating leverage and scale
- Operating earnings of $26.5 million increased 18% Y/Y and net income was up 11% Y/Y (much lower interest income Y/Y)
- GAAP EPS of $0.42, up 20% Y/Y from $0.35 (helped by lower share count)
- Quarterly free cash flow of $30.4 (defined as cash flow from operations less capital expenditures, in this case) was a record for the company, bringing cash and investments to $179.3 million (19% of current market capitalization) - the company has no debt
- Management maintained guidance for modest revenue and earnings growth this year including acquisitions (which will likely be a small contributor)
- j2 Global's return on net operating assets (RONA) remains extremely high at 82%
Many companies are reporting tremendous Y/Y sales and earnings declines, yet their shares move higher.... j2 Global delivers revenue and impressive earnings growth, but shares are lower -- makes no sense to us here at CommonStock$ense, yet the market is often irrational.
Disclosure: long JCOM.
© 2009 Jeffrey Walkenhorst
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