Home and Beauty Sales Push ValueVision to New 52-Week High

Posted on: March 8, 2013
Shopping

Shares of ValueVision Media Inc. hit a new 52-week high on Thursday at $3.25. The stock experienced a boost in share prices a day after reporting fourth quarter earnings. The Company is the owner of cable television retail channel ShopNBC, a 24-hour shopping network channel that markets brand name and private label products.

In the fourth quarter, the Company not only had a loss but missed Wall Street’s expectations. Fortunately the Company beat the revenue expectation which many shareholders deem as a positive sign who are seeking high growth out of the company. ValueVision reported a larger loss for the fourth quarter reflecting a large asset valuation charge. The Minneapolis Company said it lost $11.4 million, or 23 cents per share, over the three months ended Feb. 2. It lost $8.3 million, or 17 cents per share, a year earlier. Revenue rose to $177.5 million from $147.5 million.

The Company said late Wednesday after the market closed that its home and beauty businesses did well and its consumer electronics unit recovered from a year earlier. For the year, ValueVision lost $27.7 million, or 57 cents per share, in 2012 after losing $48.1 million, or $1.03 per share, in 2011. Revenue rose 5 percent to $586.8 million from $558.4 million.

In a report published Thursday, Piper Jaffray kept its Overweight rating on ValueVision Media and raised its price target from $3 to $5.

“Management indicated that variable transaction cost per unit was $2.41 in FQ4, down from $2.88 last year, driven in large part by a new automated voice response system which was upgraded in 2012. Management also indicated that it has been pleased with a test of high-definition broadcasting in about 1.7 million homes in WA and FL. These initiatives, as well as the fact that Shop began saving $15 million annually in January 2013 as the result of a new fee agreement with a major satellite provider, position VVTV for profitability in FY14 if the company can meet our estimates of high-single-digit revenue growth next year,” noted Piper Jaffray.

Shares of VVTV closed at $3.16, up 15.75% on Thursday.

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