Earnings Preview: CyberSource

CyberSource (CYBS) is expected to report Q2 earnings after market close Thursday, July 24, with a conference call scheduled for 4:30 p.m. ET.

Guidance

The consensus estimate is 15c for EPS and $54.32M for revenue, according to First Call. Company guidance provided on the last earnings call is for Q2 EPS of 14c on $54 to $54.5M in revenue. The Q2 is a seasonally slower quarter for online transactions and merchant adds.

Analyst Views

Barrington believes Q2 results will be in line at 14c. During the quarter CyberSource's fraud prevention services were enhanced with the addition of device fingerprinting. The company also announced an agreement with China-based Pay Ease Technologies, which gives U.S. and U.K. merchants broad online payment support to facilitate entry into the Chinese market. This new solution places CyberSource on track to be live in China by the Summer Olympics. CyberSource plans to increase its presence in France, Germany, the Netherlands, Spain, Portugal, and Italy with gateway and acquiring services expanding the number of payment types processed.

The company continues to build its presence in India providing gateway services to the airline and telecom industries. Barrington strongly believes that CyberSource has solid long-term growth potential driven by the rapid acceptance and growth in the use of retail e-Commerce in the domestic and international markets.

Wedbush, for Q2 expects EPS of 16c and revenue of $54.6M. CyberSource remains the favorite growth company in Wedbush's coverage universe, as they believe it will continue to grow revenues 20%+ and earnings 30%+ even in a tougher economic environment. Based on checks, JMP Securities is comfortable with their Q2 EPS estimate of 14c, and their belief that the company may raise its guidance to about 64c for 2008.

Looking forward: 2008 guidance has been for EPS of 59c to 61c on $215M to $220M in revenue.