Why United Online Shares Lost Connection

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of United Online , an Internet service and consumer products provider, fell as much as 18%, following the release of its fourth-quarter earnings results.

So what: For the quarter, United Online reported a 0.5% increase in revenue, to $219 million, and an adjusted profit of $0.14, down 44% from the previous year, and $0.02 below analysts' expectations. FTD, the company's flower business, showed robust sales gains of 7%, while revenue at its content and media and communications segments dipped 13% and 9%, respectively. United Online CEO, Mark Goldston, made no qualms about his plans to eventually spin off FTD and seek strategically advantageous alternatives for its other businesses, which could include patent sales.


Now what: Definitely not a great quarter from the former dial-up Internet giant, but this could potentially be an attractive entry point. With United Online, you aren't going to get amazing growth prospects, but will instead be rewarded with a robust dividend and pretty consistent profitability. Everything really depends on what United Online does with FTD, as it represents 70% of its revenue, and accounted for all of its growth, but I'd suggest at least adding United Online to your Watchlist, and digging deeper if the stock continues to fall.

Craving more input? Start by adding United Online to your free and personalized Watchlist, so you can keep up on the latest news with the company.

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The article Why United Online Shares Lost Connection originally appeared on Fool.com.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. The Motley Fool owns shares of United Online. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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