MagicJack Boosts Estimates, Swaps CEOs, Settles With Verizon

December 28th, 2012 by · 2 Comments

magicJack VocalTec (NASDAQ:CALL, news, filings) ended what has been a very powerful year with a a flurry of holiday announcements, the least surprising of which was its now quarterly habit of pre-announcing its results.

Yes, as it has done for many quarters in a row now, magicJack has announced that it will easily best analyst projections for Q4 revenues and earnings per share. With just three days left in the quarter, the company is projecting greater than $39M in revenue and $0.70 in operating income per share. Additionally, they’ve bought back enough shares to bring the total outstanding down to about 18.8M as 2012 closes.  If last year one had projected MagicJack with 2012 revenues of $156M and earnings per share of some $2.00, one would have been considered quite mad.  Yet here we are, but with the company’s stock price at $16 despite it all – just as mad now as then perhaps.

Meanwhile, magicJack-Vocaltec is also undergoing a leadership shuffle, effective January 1, 2013. Current CEO and industry protagonist Daniel Borislow will be stepping back into product development, handing the reins to the current Chairman of the Board Gerald T. Vento as President and CEO. Meanwhile, current board member Donald Burns will take over for Mr. Vento as Chairman of the Board. Borislow has always been a bit more colorful than the market likes, and has always clearly relished his role as inventor more than as an administrator. Borislow himself puts it quite succinctly:

I have never been prone to heeding others’ advice or, for that matter, genuinely interested in other people’s opinions, and that style may be viewed as one not benefiting a public company. Time will not tell. The Company is fortunate to have the perfect person for the CEO job, someone who has been part of our growth strategy since 2008. So the Dan Borislow show is coming to an end and a new era begins. I look forward to the change and thank Jerry for the passion he brings and sacrifice he will make over the coming years for the benefit of the shareholders.

That’s true enough, although from a blogger standpoint I’ll be sorry to see Borislow fade into the background – although I somehow doubt he will be as successful as planned!

And just after Christmas, magicJack filed an 8-K with the SEC describing an access fee settlement with Verizon. All disputes with the telecommunications giant have been settled through the end of 2012, with negligible impact to the company’s financials. They have other such legal items out there, but with the FCC’s clarifications on such things we’ll be seeing a general trend toward intercarrier compensation disentanglements across the sector. Hopefully, anyway.

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Categories: Financials · VoIP

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