Zacks_Analysts' Blog : Vistaprint Beats, Guides Higher - Analyst Blog

Vistaprint N.V. (VPRT) has declared first quarter 2012 adjusted earnings of 31 cents per share, handily beating the Zacks Consensus Estimate of 12 cents. The better-than-expected results were driven by a double-digit growth in the top line.

However, earnings per share (EPS) decreased 14% year over year and touched the upper end of the company’s guided range of 20–30 cents. On a GAAP basis, EPS decreased 21% to 19 cents during the quarter, surpassing the company’s guided range of 7–17 cents.

The company registered a 25% year-over-year growth in revenues to reach $212.4 million, including the favorable impact of foreign currency. Revenues were within management’s guidance range of $207 million to $215 million and surpassed the Zacks Consensus Estimate of $211 million. Geographically, Vistaprint derived 56%, 38% and 6% of revenues from North America, Europe and Asia-Pacific markets, respectively.

Behind the Headline Numbers

In the first quarter, gross margin rose 10 basis points (bps) from the year-ago quarter to 63.2%. Operating income was $9.7 million, reflecting a downside of 21% from the prior-year quarter. Operating margin plunged 260 basis points from the prior-year quarter to 4.6%.

However, total order volume increased roughly 18% from the prior-year quarter to 5.9 million. Vistaprint added 1.9 million new customers in the quarter.

Financial Position

At quarter end, the company had $161.1 million in cash, cash equivalents and short-term marketable securities. Total assets of the company were $469.0 million while total liabilities amounted to $108.8 million.

Guidance

For the second quarter of 2012, Vistaprint expects adjusted EPS in the 73–85 cent range. On a GAAP basis, the company expects EPS in the range of 57 cents to 69 cents and revenues in the range of $285 million to $306 million.

For full-year 2012, the company expects adjusted EPS in the range of $1.74 to $1.86 (versus $1.58 to $1.68 provided in August) per share. On a GAAP basis, EPS is projected between $1.08 and $1.20 (versus $1.10–$1.20 provided in August). Revenue is expected in the range of $997–$1,049 million.

Our Take

Vistaprint remains on track to grow inorganically. Recently, the company acquired Albumprinter Holding B.V., a privately held Dutch photo book company. Apart from this, the company has a strategic partnership with Staples that will extend its reach to 1,600 retail locations of the latter across the U.S. Additionally, share repurchase activity also boosted its full-year earnings guidance.

On a negative note, 2012 could prove to be a challenging year for Vistaprint as there are a few planned investments which will weigh on its bottom line. Revenue growth will also be slower year over year. To add to the worry, an unfavorable exchange rate will also take a toll on Vistaprint’s revenue.

Vistaprint, which competes with Sykes Enterprises Inc. (SYKE) and TeleTech Holdings Inc. (TTEC), currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are maintaining our long-term Underperform recommendation on the stock.