S-1 Corp. (NASDAQ: SONE) managed to be perhaps the biggest earnings surprise of the week. The online platform provider for banking sites reported increased earnings in 2007 with a net income of $19.5 million compared to $17.9 million in 2006. Earnings per share were $0.32 compared to $0.25 in 2006. The quarter estimates were what drove the stock: its quarter earnings were $0.11 on a GAAP EPS basis and a 6% revenue to $53.4 million. Its license revenues grew 30%. For the year it noted that its largest customer actually had a decline of $4.5 million in 2007, but its other customers’ revenues grew 11.8%.
According to CEO Johann Dreyer, S-1 Enterprise was licensed by three top U.S. banks and added over 20 Postilion customers in 2007. He stated, “I am very pleased with our performance in 2007. We have turned S1 into a profitable organization that is well positioned for the future." Based on today’s move, you can bet he’s pleased. So are his shareholders.
If we would have told you yesterday that an online platform and service provider that sold to banks and other financial institutions was going to do this well in the current climate in the entire financial sector, you would have said we were nuts.
Before the news, analysts still had an average target north of $9.00. S-1’s stock is up 25% today, up to $7.55. The 52-week range is $4.95 to $9.79.
Jon C. Ogg
February 27, 2008