MeetMe (MEET) Earnings: What to Expect

NEW YORK (TheStreet) -- Dating social network MeetMe (MEET) is due to report before the bell Friday, March 14.

Analysts surveyed by Thomson Reuters anticipate a net loss of 2 cents a share and $13 million in revenue in the three months to December.

For fiscal 2013, a net loss of 27 cents a share and $40.3 million in revenue is forecast.

In January, the New Hope, Penn.-based business said it expects quarterly revenue of around $13 million, 12% higher year over year and 29% sequentially. Mobile revenue is expected to come in at a quarterly record high of $5 million, 127% higher year over year.

"We are excited by the prospect of returning to year-over-year revenue growth in the fourth quarter of 2013," said CEO Geoff Cook in a statement on the pre-announcement news. "The fourth quarter represents an important inflection point for MeetMe, as the combination of mobile growth and web stabilization is now generating overall revenue growth. We believe the mobile monetization infrastructure we built in 2013 will serve us well in 2014 and beyond."

CFO David Clark added, "We are pleased to see mobile emerge as our primary driver of revenue growth. Our expected year-over-year revenue growth is driven primarily by the success of our mobile advertising strategy."

By midmorning Monday, shares had added 9.8% to $4.15.

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TheStreet Ratings team rates MEETME INC as a Sell with a ratings score of D. The team has this to say about their recommendation:

"We rate MEETME INC (MEET) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Internet Software & Services industry and the overall market, MEETME INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • MEETME INC has improved earnings per share by 42.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, MEETME INC continued to lose money by earning -$0.18 versus -$0.44 in the prior year. For the next year, the market is expecting a contraction of 50.0% in earnings (-$0.27 versus -$0.18).
  • MEET, with its decline in revenue, underperformed when compared the industry average of 16.5%. Since the same quarter one year prior, revenues fell by 13.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Although MEET's debt-to-equity ratio of 0.09 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.43, which illustrates the ability to avoid short-term cash problems.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 42.6% when compared to the same quarter one year prior, rising from -$2.59 million to -$1.49 million.

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