Earnings Preview: ValueClick

| About: Conversant, Inc. (CNVR)

ValueClick (VCLK) is expected to report Q2 earnings Thursday July 31 after market close, with a conference call scheduled for 4:30pm ET.


The consensus estimate is 14c for EPS and $165.09M for revenue, according to First Call.

Analyst Views

On July 17, ValueClick provided lower revenue guidance of $163M to $164M and EPS guidance of 17c to 18c. The company also lowered its 2008 revenue guidance to a range of $655M to $675M, and EPS of 69c to 71c. Craig Hallum said it believes the Q2 weakness and reduced outlook are less about ValueClick and more about macroeconomic issues. Except for Google (NASDAQ:GOOG), the firm had doubts that any of the big boys of online advertising will be posting solid results and forecasting strength.

The CEO of ValueClick said, "Due to increasing macroeconomic uncertainty, we no longer anticipate the seasonal strength in ad spending we typically see in the second half of the year." Craig Hallum expects the company will start putting its $101M buyback authorization to work sooner, rather than later. In its opinion, the dramatic decline in fundamentals has been more than captured in the stock price.

Other recent Street commentary: July 30, JP Morgan assumed coverage and downgraded ValueClick due to a lack of near-term catalysts as they expect business to remain weak through 2008. Also, on July 28, Needham said it thinks the potential for downside is limited and already priced into shares, and it thinks the company could become a takeover target. Throughout the last few months' ValueClick options, the calls have been active on renewed takeover chatter by someone of the likes of Microsoft (NASDAQ:MSFT). Of note was a positive Barron's Online article on July 30, highlighting the company's cheap valuation.