Yesterday, after market close, j2 Global Communications, Inc. (JCOM) reported financial results for its fourth quarter 2009. Overall the results were significantly below the Zacks Consensus Estimates. Quarterly total revenue was $60.9 million, remaining flat year-over-year but below the Zacks Consensus Estimate of $62 million. Subscriber Usage revenue was $60.2 million, up 1% year-over-year.
 
Quarterly net income was $17.7 million or 39 cents per share compared to $20.3 million or 45 cents per share in the year-ago quarter. This was primarily due to higher share-based compensation expenses. Fourth quarter EPS of 39 cents was well below the Zacks Consensus Estimate of 41 cents.
 
Quarterly gross margin was 83.8% compared to 82.9% in the year-ago quarter. This reflects the aggressive cost cutting measures taken by management during the past one year. However, operating expenses, in the reported quarter, were $26.7 million compared to $23.2 million in the prior-year quarter. In the same quarter, share-based compensation expenses were more than $2.9 million compared to a little less than $2 million in the year-ago quarter. 

j2 Global Communications generated $23.9 million cash from operation during the fourth quarter compared to $25.7 million in the prior-year quarter. Quarterly free cash flow (cash flow from operation less capital expenditure) was $23.3 million compared to $25.4 million in the year-ago quarter.
 
At the end of fiscal 2009, j2 Global Communications had approximately $243.7 million of cash & marketable securities on its balance sheet compared to $161.9 million at the end of the prior-year quarter. The company had no outstanding debt. 

Future Financial Outlook
 
j2 Global targets a revenue growth of around 3%-7% year-over-year for full fiscal 2010. EPS (excluding stock-based compensation expenses) is expected to stay at the same level as in fiscal 2009 since management intends to reinvest its incremental operating income in initiatives designed to accelerate growth in 2011 and beyond. 

In the after-market trade of NASDAQ, stock price of j2 Global Communications was down 13 cents (0.6%) to $21.
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