FTD Misses Q4 Estimates (FTD)

| About: FTD Group (FTD-OLD)
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Mark Mahaney Smith Barney CitigroupCitigroup analyst Mark Mahaney on online and telephone flower retailer FTD's December 29th earnings pre-announcement:


  • FTD announced that it experienced a 4%Y/Y decrease in Consumer orders in December, citing a significant increase in search engine costs and the company's resultant decision to not pursue high cost order volume. FTD also announced the sale of a small greeting cards business and announced that it had repurchased 252K shares under a $30MM repurchase program.
  • FTD lowered its FY06 (June) revenue guidance from $480MM to $460MM, while maintaining its EBITDA guidance of $67.5MM, and increasing its EPS guidance from $0.75 to $0.76.
  • Thus, we are lowering our FY06 revenue estimate from $473MM to $460MM and our EPS estimate from $0.78 to $0.76. No change in our Hold rating our $13 TP. Ramping marketing costs have been a consistent concern . Decreases in '07E and '08E revenue caused our similar downward EPS revisions.
  • Modest positive derivatives are search providers Google and Yahoo!.