Earnings Preview: Digital River

| About: Digital River, (DRIV-OLD)
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Digital River (NASDAQ:DRIV-OLD) is expected to report Q3 earnings Tuesday after the close with a conference call scheduled for 4:45 pm.


The consensus estimate is 47c for EPS and $98.4M for revenue, according to First Call. Guidance from the last earnings call is for EPS of 47c and revenue of $98.5M.

Analyst Views

At the end of September Digital River was the subject of ratings downgrades by RBC Capital and Credit Suisse due to slowing consumer spending and the overall weakening economy.

Collins Stewart expects a modest miss to an in-line top-line and a miss bottom-line quarter. Collins is estimating total revenue of $98.4M, adjusted EBITDA of $26.6M, and 45c in non-GAAP EPS.

On the call, in addition to current trends in e-commerce services, investors will be looking for updates on Microsoft (NASDAQ:MSFT) and Symantec (NASDAQ:SYMC) contracts, two major CE deals the company talked about during Q2 earnings, and signs of traction in the gaming and consumer electronics verticals. Investors will also look for comments on the recently terminated SEC stock option probe that was announced on September 30.

In terms of forward guidance, Collins Stewart is expecting an in-line to lowered guidance. Previous FY08 guidance from the Q2 earnings release was for $2.00 and $410M in revenue.