MagicJack Preannounces Q2 Fireworks

magicJack VocalTec (NASDAQ:CALL, news, filings) is once again trumpeting its results before quarter’s end. The upstart VoIP provider said today that earnings per share over the first two months have already exceeded analyst projections for the full quarter, with all of June now just adding icing on top of the cake.

Total earnings per share ‘may surpass $0.43’, which would more than double that of the prior quarter and $0.14 or more above the composite analyst projections on Yahoo Finance and in excess of their April projection of $0.40+. Meanwhile, the company says that revenues should exceed $36M, a threshold that is just above the $35.9M put forth by the analyst community.  MagicJack says the strong performance comes from sales of its new magicJack PLUS product, higher access revenues, phone number sales, and a tight rein on expenses.

Meanwhile, the company said that it would cut back on its more aggressive put/call stock buyback strategy given the “unhelpful noise” it caused recently. Instead, they will be moving to more traditional means of buying back stock. I dunno, I kind of liked the more aggressive method – even if it was riding the edge a little bit to have open options contracts mingled with pre-announcements and such.  The big boys can take care of themselves, after all.

MagicJack estimates it can reduce outstanding shares to 18-19M within a year while maintaining its balance sheet, down from 20,231,845 at the end of April according to their most recent 10-Q.

The company’s stock is up sharply already today in response to today’s pre-announcement.  Perhaps the message magicJack has been working so hard to get out there is finally sinking in.  Analyst projections have been substantially lower than company forecasts for a number of quarters, certainly suggesting a disconnect somewhere.

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Categories: Financials · VoIP