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Harris Revenues Grow in US, Fall in Europe
Harris Interactive achieved revenue of $54.8m in the last quarter of 2005 - ahead of its expectations, despite a fall in European revenue. The company has also announced that it now has exclusive European ownership rights to the Harris name. TNS previously held rights to the name and trademarks in Europe.
The company saw a revenue increase of 4% in the last quarter, with growth of 12% in the US but a fall of 15% in Europe. European revenue was affected by the erosion of the traditional research business, lower than expected Internet revenue growth, and unfavorable foreign exchange rate differences.
Internet revenue in both regions grew by more than 20%. In the last quarter, Internet revenue comprised 59% of total revenue, 67% of the US revenue and 28% of European revenue.
Results for the last two quarters are as follows.
Three months ending 31 December 2005 (the company's 2nd fiscal quarter 2006)
Revenue $54.8m (+4%)
US revenue $43.7m (+12%)
European revenue $11.2m (-15%).
Global Internet revenue $32.4m (+ 26%)
US Internet revenue $29.2m (+26%)
European Internet revenue $3.2m (+21%)
Operating income $4m (+68%). This includes $0.7m of non-cash stock-based compensation expense. Figures for the same period a year ago did not include any stock-based compensation expense, but did include one-time pre-tax severance costs of $0.8m.
Net income $2.4m/$0.04 per diluted share (+66%)
Six months ending 31 December 2005
Revenue $103.8m (+13%)
US revenue $80.8m (+18%)
European revenue $23m (no change).
Global Internet revenue $60.4m (+21%)
US Internet revenue $54m (+21%)
European Internet revenue $6.4m (+25%)
Operating income $6m (+18%). This includes $1.3m of non-cash stock-based compensation expense. Again, figures for the same period a year ago did not include any stock-based compensation expense, but did include one-time pre-tax severance costs of $0.8m.
Net income $3.6m/$0.06 per diluted share (+16%)
For the next quarter, the company expects revenue in the range of $53 to $55m, and net earnings of between $0.02 and $0.03 per diluted share. For the full fiscal year (ending on 30 June 2006), it expects revenue of between $214m and $220m and earnings of between $0.12 and $0.14 per fully diluted share.
Frank Connolly, the company's Executive VP Chief Financial Officer, said the increase in profitability was due to strong US revenue growth and lower costs. He added: 'The slower than expected pace of progress in our UK business, combined with higher second half investment spending and planned head count additions to support anticipated fourth quarter revenue growth, will impact third quarter margins.'
Gregory Novak, President and CEO, says the company will continue its 'disciplined focus on top-line growth, intelligent expense management, and investing in our people in order to create a high level of shareholder value.'
The company is online at www.harrisinteractive.com
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