TheStreet.com (TSCM), online home of populist stocks pundit Jim Cramer, reported higher Q1 revenue, but missed Street estimates on both sales and earnings, and the stock dropped nearly 15% to $8.08 in morning trading.
Earnings were hit by higher spending in the quarter due to the redesign of TheStreet.com and BankingMyWay.com, as well as the launch of a spinoff site, MainStreet.com.
Q1 revenue rose 31% to $18.9 million, up from $14.5 million a year ago, slightly lower than the $20 million expected by Wall Street. Net income came in at $2.4 million, or $0.07 a share, down from $3 million or $0.11 per share a year earlier, below Wall Street’s EPS estimate of $0.10.
Earlier this month, TheStreet solved its most pressing problem, ending a contract deathmatch with star pundit Cramer, who had been working without a long-term contract for four months. The deal pays Cramer $8.6 million over three years plus performance incentives and additional stock. Cramer, a co-founder of The Street, owns 14% of the company.
UPDATE: Disturbing note from the conference call: unique visitors to TheStreet.com sites were 21 million, a 22% decrease y/y.
CEO Thomas Clarke, Jr. on the financial ad climate: “What we are seeing in the ad market is this–advertisers have a base spend. What you’re not seeing is that incremental spend that you traditionally would get at the end of the quarter. It’s hard to judge how that will play out over the next few quarters.”
Earlier: TheStreet Takes Stake In Geezeo
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