Quinstreet, Inc (QNST) Misses Q1 EPS by 3c; Will Implement Corp. Restructuring
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Quinstreet, Inc (NASDAQ: QNST) reported Q1 EPS of $0.01, $0.03 worse than the analyst estimate of $0.04. Revenue for the quarter came in at $73.4 million versus the consensus estimate of $82.8 million.
Quinstreet also announced a corporate restructuring and other steps to accelerate margin expansion, grow cash flow, and increase shareholder value.
The corporate restructuring will reduce fixed costs by approximately $17 million annually, including a reduction in personnel costs of approximately 25%. Benefits from the restructuring will begin to take effect in the December quarter. The Company also expects to incur a one-time restructuring charge in the range of $2.5 million to $3.5 million in the December quarter.
The restructuring includes a reorganization that streamlines operations and increases focus on key growth products and client verticals. As part of the reorganization, the leadership of the Company’s Education and Business-to-Business technology verticals has been changed, and all Financial Services verticals have been consolidated under the successful Insurance leadership team.
In addition, the Company announced the authorization of a stock buyback program, initially limited to offsetting annual dilution due to equity compensation. Dilution from equity compensation has averaged approximately 1.4% of outstanding shares annually over the past five years. The Board will assess the buyback program on an ongoing basis as circumstances change.
The Company also announced that it will undertake a strategic review of its business portfolio to further evaluate resource allocations and investments, and to analyze and explore possible divestitures and strategic partnerships. The objective of the review will be to identify opportunities to further increase shareholder value, and to enable greater focus on and investment in the Company’s most successful products and businesses, particularly its Financial Services client vertical.
For earnings history and earnings-related data on Quinstreet, Inc (QNST) click here.
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