Earnings Preview: Digital River

Digital River (DRIV) is expected to report Q4 earnings Thursday with a conference call scheduled for 4:45 pm ET.

Guidance

The consensus estimate is 53c for EPS and revenue $95.84M, according to First Call. Stanford says Digital River's 4Q numbers should be in-line to slightly better than consensus. They also say that driving potential upside are the favorable figures from Microsoft (MSFT) regarding their Vista operating system, and Symantec (SYMC), in terms of subscriptions for their product, favorable outlook from Microsoft, and a strong showing in online 4Q sales of video games and gaming consoles. This will likely be tempered by a lower level of computer virus activity in the 4Q, as well as an overall slower rate of growth in eCommerce transaction volume in the 4Q07 holiday season.

Key issues for the conference call: An update on the renegotiated contracts with Symantec and Electronic Arts (ERTS); updates on the delays experienced in the subscription business, comments on the competitive landscape, and guidance. Most analysts are optimistic regarding the 2008 outlook for the company.