Highlights from PaineWebber report on SPLN, 04/21/99: "Buy"
Here are summary remarks from the recent PWJ report on SPLN. PWJ always very conservative, no hype, no investment banking axe to grind. Nice showing. "Thank you, PaineWebber."
BAM
Report written by Christopher Dixon, Entertainment Analyst, and Catherine Kim, Associate Analyst
(c) 1999, PaineWebber
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o SportsLine USA, Inc. reported better than anticipated first quarter revenues of $11.1 million, a 63% gain from the corresponding quarter's $6.8 million, exceeding our estimated $10.7 million, underscoring the advantages of the company's diverse revenue streams.
o Strong advertising revenues of $5.9 million (exceeding out estimated $5.5 million) were directly impacted by CBS promotions and combined marketing initiatives with CBS, in addition to improved CPM's $22 (versus last quarter's $16). E-commerce revenues improved by 375% from the previous year's $467,000 to $2.2 million (exceeding our estimated $1.7 million) positively impacted by high traffic from the NCAA Tournament and the Super Bowl. Membership revenues and premium services of $1.3 million (below our estimated $2.1 million) were negatively impacted by the NBA lockout, but should improve to previous levels with the baseball season fantasy leagues.
o Average page views for the quarter were approximately 6.8 million page views per day, against the previous year's 4.4 million with a total reach in March of 7.5% led by increased CBS promotion, Super Bowl and NCAA coverage. Management stated that the April traffic is tracking in line with March, at average daily page views of 9 million a day, which management believes is sustainable with the baseball season and PGA tournament attractions in the coming quarters.
o The company reported EPS of a loss of $(0.47) in line with our estimated $(0.50) loss for the quarter and EBITDA of a loss of $(5.3) million, better than our estimated $(5.5) million. SportsLine remains on-track to be cash flow positive by year end 2000.
o Maintain Buy rating with 2000 target price of $75 given strong underlying fundamentals and unique position as a focused provider of sports related content across the Web and strategic partnerships with AOL and CBS. In addition, the company remains well capitalized with $237 million in cash and marketable securities at quarter end. |
