RRSat CEO says contracts and acquisitions will power growth
During a morning conference call, satellite content distributor RRSat Global Communications Network Ltd. (Nasdaq: RRST) executives said new contracts will continue to propel revenue growth. A recently announced expanded contract with the Soundtrack Channel – a video channel devoted to movie music and entertainment – and a $7 million contract renewal with satellite broadcaster Direct to Home will increase revenue, CEO David Rivel said during the call.
Rivel would not say if the contract growth will continue throughout the year, but reaffirmed the company’s outlook of a year-over-year revenue increase.
This morning, RRSat increased its fiscal year revenue guidance to between $57 million and $57.5 million, compared with its previous outlook of between $55.5 million and $56 million. The company said it expects revenue for the third quarter ended Sept. 30 to be in the range of $14.7 million to $14.9 million, compared with $11.54 million a year earlier.
The weakened U.S. dollar has not impacted the company’s bottom line dramatically, Rivel said.
“Looking ahead, we believe 2007 offers many opportunities for the company,” Rivel said. “We are generating substantial organic growth.”
Rivel said the company has also identified several acquisition targets that will help RRSat expand its North American presence. The company currently provides services in Europe, Russia and Asia.
Before the opening bell, RRSat said it earned $2.6 million, or $0.15 a share, in the second quarter ended June 30, compared with $2 million, or $0.15 a year earlier. Revenue totaled $14.7 million, up from $10.3 million in the year-earlier period.
In midday trading, shares of the small-cap company are down $1.53, or 6.63%, at $21.56. Over the last 52 weeks, shares of the company have ranged between $10.35 and $24.92.
