So, a penny better than estimates. Wow. IMO, TLindt is correct in seeing that seek is copying the model of xcit, except that xcit was extremely aggressive in acquisitions whereas seek is not. Not too long ago, xcit was trading at 7 with the most fascinating press release being the search for dot.com. One day, they smartened up and started making deals. Deals that generated cash. Surprise, the stock went up and went up big.
Lcos is the better comparison, company to company, since seek is not in xcit's league at the moment as far as revenues are concerned. But, the question will be whether there is any need for a carbon copy of xcit, when there is xcit itsel on which to advertise. The price per imprint falls dramatically when you don't have the real estate that the advertisers want. And this is all about real estate.
So the earnings were underwhelming. Nobody really expected differently, but at least they didn't disappoint. The next question is whether seek will follow xcit in announcing the deals that are needed to make for some real revenue growth. And one more thing to remember when comparing xcit and seek. Xcit also has huge debt, as a result of its acquisition strategy, and needs that rev to stay afloat. Xcit proved up to the task. Eyeballs are the first step for seek. The next, and I have said this before and say it again, is that it needs the money that's supposed to follow the eyeballs, and that means DEALS.
SHG |
