Earnings Preview: ValueClick

| About: Conversant, Inc. (CNVR)

ValueClick (VCLK) is expected to report Q1 earnings after the market close on Tuesday, May 5, with a conference call scheduled for 4:30 pm ET.


The consensus estimate is 12c for EPS and $130.37M for revenue, according to First Call. ValueClick on its last earnings call provided what was viewed as conservative to disappointing guidance of 11c-12c on revenue of $126M-$132, and EBITDA of $29M-$31M.

Analyst Views

ValueClick is feeling the impact of declining advertising spending as consumer confidence wanes. In fact, back then Merriman said the Q1 guidance "paints an ugly picture," and the Q1 revenue guidance indicated a decline greater than Q4 results showed. On May 4, Merriman said it now believes ValueClick is likely to report upside to Q1 consensus estimates due to strength in its Media segment and costs cuts. However, the firm maintains a Neutral rating on the stock.

Jefferies said that while still showing negative year-over-year comps, ValueClick's Q1 results should come in ahead of expectations, benefiting from stable display pricing, improved comp. shopping and tighter cost containment yielding margins in low 20%s. The firm is estimating $134.6M in revenue, $31.2M in EBITDA and 13c in EPS. Jefferies estimates media revenues at $64.4M, down 14% year-over-year. The firm expects Comparison Shopping to decline by 37% year-over-year at $36.1M. Also, its affiliate marketing revenue estimate of $28.2M assumes a 10% year-over-year decline due to the overall weakness in retail sector, which makes up for 70%+ of ValueClick's affiliate business. Finally, Jefferies estimates technology revenues at ~$6.7M, down 5% year-over-year. Looking forward, Jefferies expect management's commentary to remain cautious, given the tough environment and structural challenges faced by ValueClick. The consensus for Q2 stands at $132.52M and 14c. :