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Contributors: Douglas McIntyre Jon C. Ogg

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Tuesday, August 01, 2006

J2 Meets, Guides In-Line, and Buys Send2Fax

j2 Global Communications (JCOM) is trading down 9.8% at $25.25 after the close; it closed at $28.00.

JCOM reported earnings right in-line at $0.28 EPS before stock items and revenues $44.4 million. Estimates were $0.28 & $44.25M. The guidance is "conservative" as the company often shows, but they announced they are acquiring Send2Fax LLC.

For the third quarter of 2006, JCOM anticipates revenues to approximate $46.2 million to $47.2 million (compared to $47.7M estimates) and Non-GAAP EPS to approximate $0.29 to $0.30 (compared to $0.30 estimates). This earnings estimate assumes an effective tax rate of approximately 30% and 51.6 million diluted shares. JCOM also expects to incur non-cash stock-based compensation expense, net of taxes, for the quarter of approximately $0.02 per diluted share.

Send2Fax, LLC is a South Carolina-based provider of Internet fax services. The key assets included in the acquisition consist of the Send2Fax(TM) brand name, its subscriber base and related technology. Terms of the acquisition were not disclosed, although the financial impact to j2 Global is said to be immaterial.

Jon C. Ogg
August 1, 2006

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