Web.com Group Q2 Loss Narrows, Adj. Earnings Beat View

(RTTNews) - Internet services and online marketing solutions provider Web.com Group, Inc. (WWWW) on Thursday reported a loss for the second quarter that narrowed from last year on strong revenue growth and subscriber additions. Excluding items, adjusted earnings per share beat analysts' estimates. The company's shares gained more than 4 percent in extended trades.

David Brown, Chairman and CEO of Web.com said, "Web.com posted strong results for the second quarter, with both revenue and profitability exceeding the high end of our guidance. We are delivering on our strategy of consistently and profitably adding net subscribers, generating average revenue per user expansion across our three million plus subscribers and achieving best-in-class customer retention levels."

Web.com added 25,700 net new subscribers from the end of the preceding first quarter to end the second quarter with total net subscribers of about 3.06 million. Average revenue per user in the quarter was $14.09, representing a sequential increase from $13.89 in the first quarter. Customer churn was about 1 percent.

The Jacksonville, Florida-based company's second-quarter net loss narrowed to $9.74 million or $0.20 per share from $19.06 million or $0.41 per share in the year-ago period.

Adjusted earnings for the quarter were $26.43 million or $0.51 per share, compared to adjusted earnings of $19.06 million or $0.38 per share in the previous-year quarter. On average, 13 analysts polled by Thomson Reuters expected the company to earn $0.49 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter increased 22 percent to $120.45 million from $98.95 million in the same period last year. Adjusted revenues for the quarter were $131.4 million. Analysts had a consensus revenue estimate of $130.64 million.

Looking ahead, Brown said, "We believe that Web.com is well positioned to accelerate revenue growth as we exit 2013, making progress toward our longer-term target of low-teens revenue growth. We also continue to generate substantial profitability and cash flow, enabling the company to continue investing in growth initiatives and at the same time de-leveraging our balance sheet."

WWWW closed Thursday's regular trading session at $27.41, up $1.43 or 5.50 percent on a volume of 1.04 million shares. In after-hours, the stock further gained $1.29 or 4.71 percent to $28.70.