Earnings Preview: ValueClick

| About: Conversant, Inc. (CNVR)

ValueClick (VCLK) is expected to report Q2 earnings after the market close on Tuesday, August 4 with a conference call scheduled for 4:30 pm ET.


The consensus estimate is 14c for EPS and $128.32M for revenue, according to First Call. Guidance provided by management on its last earnings call was for Q2 EPS of 19c to 20c, and revenue of $124M to $130M.

Analyst Views

Kaufman is looking for in-line Q2 results with a neutral trading reaction in the shares. The firm expects ValueClick's Q2 results to show continued headwinds from advertising and e-commerce, and expect revenues to decline 19% Y/Y. Kaufman's Q2 revenue, EBITDA, and pro forma EPS estimates are $128M, $33M, and 20c. Kaufman estimates lead generation revenues of $28M, down 35% Y/Y, and display advertising revenues of $32M, down 3% Y/Y. Also, Kaufman will look for commentary about stabilizing signs for the lead generation segment. Kaufman expects the comparison shopping segment to remain soft, due to fewer commercial queries from consumers. The firm expects affiliate marketing revenues of $26.8M to be down modestly on a Q/Q basis due to seasonality. They don't expect recent affiliate marketing tax-related concerns to have any material impact on ValueClick's affiliate marketing segment. Technology revenue is expected at $6.3M, down 17% Y/Y.

Separately, Jefferies believes ValueClick's Q2 results should be in line with muted Street expectations, with revenues down 18% and EPS down 21%Y/Y. They believe stabilization in display advertising, improved comparison shopping and tight cost management should yield EBITDA margins in the mid-20% range. However, Jefferies remains on the sidelines in ValueClick shares on a lack of visibility and short-term catalysts.