United Online, Inc. (UNTD) has been riding the social media phenomena over the last year and has strung together 3 consecutive earnings surprises.
United Online operates Internet retail and social networking sites including Classmates Media, mypoints.com, and the floral brands FTD and Interflora. Its communications services include Internet and e-mail providers NetZero and Juno.
United Online Beat by 8.70% in the Third Quarter
On Nov 4, United Online reported third quarter results that surprised on the Zacks Consensus by 2 cents. Earnings per share were 25 cents compared to the Zacks Consensus of 23 cents.
The company’s social networking site Classmates.com saw strong growth in the quarter as it added more than 700,000 gross pay accounts and tripled quarterly net growth in pay accounts to 164,000 from 58,000 in the second quarter of 2009.
Revenue rose 28% to $216.2 million but much of that was due to the acquisition of FTD which occurred in the middle of the third quarter of 2008- on Aug 26, 2008. The fourth quarter will be the first full quarter of comparison that includes the FTD segment.
Communications, which is the company’s value-priced e-mail and Internet services, continued to be weak as revenue fell 18% year over year as pay accounts declined.
2009 Estimate Climbs
The 2009 Zacks Consensus Estimate climbed 4 cents to $1.10 in the last 60 days. Analysts expect earnings growth of 29.71% compared to 2008.
However, 2010 is projected to be weaker. The 2010 Zacks Consensus has been holding at $1.04 per share in the last 60 days, or a decline in earnings of 5.90%.
Value Fundamentals
United Online is still cheap. It is trading with a forward P/E of just 6.56 and a price-to-book ratio of 1.47. United Online has an outstanding 1-year return on equity (ROE) of 23.82%, well above the industry average of 6.39%.
United Online is a Zacks #2 Rank (buy) stock. The company also rewards shareholders with a dividend with a large yield of 5.60%.
Read the May 12, 2009 article.
Update to Previous Value Zacks Rank Buy Stocks
Maidenform Brands Inc. (MFB) saw sales jump in the third quarter as shapewear sales remained hot. The company has surprised on estimates the last 4 quarters by an average of 35.60%. Read the full article.
SkyWest, Inc. (SKYW) recently reported that its November passenger traffic jumped 9.4% and its load factor also climbed as the company flew fuller planes. SkyWest has attractive valuations, with a forward P/E of just 11.2. Read the full article.
RadioShack Corporation (RSH) has surprised on estimates 2 out of the last 4 quarters by an average of 19.49%. RSH is trading with a forward P/E of 12.34. Read the full article.
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.
