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Blue Nile and WebMD Seek Growth Overseas

Posted on Wednesday, Nov 7th 2012

According to a recent report, US Jewelry Market Report: Focus on Online Segment – 2012 Edition, consumers are continuing to shift to online options for buying jewelry. The U.S. market accounts for half of the global jewelry market. Increasing internet penetration, rising income levels, and continued growth in the amount of knowledge available online is helping shift the trend to online models.

Blue Nile’s Financials

The leading online jeweler, Blue Nile’s (Nasdaq:NILE) Q3 revenues grew 20% over the year to $89.8 million, ahead of the Street’s projections of $88.8 million. EPS of $0.14 grew 7.7% over the previous year and was also ahead of the Street’s outlook of $0.13 for the quarter.

Among other statistics, revenues from engagement sales for the U.S. market grew 32% to $54.1 million. U.S. non-engagement revenues grew 12% to $21.8 million. International sales, however, were disappointing, with revenues falling 3% ti $13.9 million. On a constant currency basis, international sales fell 1.5% over the year.

For the current quarter, Blue Nile expects revenues of $140 million-$150 million, ahead of the Street’s projections of $136.8 million. EPS projections of $0.44-$0.50 for the quarter were also in line with the market’s projections of $0.48.

BlueNile’s Growth Plan

Blue Nile has been focusing on expanding its non-engagement business. During the last quarter, it launched several smaller, non–engagement related new jewelery items for the holiday season. Last quarter, revenues from non-engagement jewelry in the U.S. grew 12%, compared with a mere 2% growth reported a quarter ago. Nile hopes that the segment will continue to deliver strong growth especially because of the holiday period this quarter. It is also hopeful of seeing that trend continue to the non-holiday period as it continues to add inventory and customers to the segment.

While international revenues may not have reported growth during the quarter, Blue Nile remains focused on expanding geographically. It is investing by building localized capabilities on their websites, customer call centers, and product fulfillment. During the current year, Blue Nile has launched websites in Japanese, Spanish, and French. Its website is now available in six languages, including Chinese.

It is looking to expand its presence in Canada and Asia in the recent quarter. It is also growing in mainland China through tie-ups with local retailers and by setting up its own office in Shanghai. In Canada, it recently expanded their selection of both engagement and non-engagement jewelry products.

The stock is trading at $40.49 with a market capitalization of $513.3 million. It touched a 52-week high of $50.00 in November 2011.

Recently, WebMD, the healthcare IT information services provider, (Nasdaq:WBMD) also announced its quarterly results. Unfortunately, their results weren’t as impressive.

WebMD’s Financials

WebMD’s Q3 revenues fell 13% over the year to $114.7 million, ahead of the Street’s target of $114.3 million. Loss of $0.02 per share was also ahead of the market projections of a loss of $0.09 per share.

Traffic to the company’s Health Network continued to grow, and reported an increase of 22% over the year to 107.2 million unique users per month. The number of page views grew 24% to 2.56 billion page views for the quarter. According to comScore’s report, WebMD was ranked the leader for both the overall health category and in every one of the top 25 health topics it tracks, including allergy, chronic pain, and asthma in the U.S.

For the year, WebMD projected revenues of $455 million-$470 million, compared with the Street’s estimated $461.5 million. It is looking to end the year with a loss of $0.29-$0.43 per share, which is in line with market projections of a loss of $0.36 per share.

WebMD’s International Expansion

WebMD is growing its international presence and recently announced the launch of Medscape Germany. The website aims to provide information and education to German health care professionals. The website will be available to more than 300,000 physicians and will offer registered users free, unlimited access to its resources, including views from world-renowned German specialists.

Mobile Remains Area of Focus

WebMD continued to focus on the mobile segment to drive revenues. During the quarter, it introduced the WebMD Baby, an app targeted at new moms, to the Android platform. It also launched WebMD Pain Coach, a mobile app for consumers and patients who are dealing with chronic pain. The app provides consumers relevant information relating to pain management techniques.

It also launched a new design of WebMD Magazine in September ,which is now available as a free interactive app for the iPad. The magazine app is consistently the leading downloaded health magazine app in Apple’s newsstand.

WebMD’s stock is trading at $14.05 with a market capitalization of $688.57 million. It touched a 52-week high of $40.24 in January 2012.

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