Wall Street Watch Wednesday: LivePerson Misses on Earnings

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LivePersonLivePerson (LPSN) may be holding for an operator.

The provider of online tech support through its cloud-based chat platform provided disappointing quarterly results on Tuesday night.

Revenue climbed 17% to $39.7 million, but that was well shy of the 20% top-line spurt that analysts were projecting. LivePerson's adjusted profit of $0.08 did match Wall Street expectations.

LivePerson provides its chat, voice, and content delivery support to thousands of companies. Clients include HP, Verizon Wireless, and Microsoft. Surely these companies can drum up in-house solutions, but LivePerson's expertise is the "intelligent engagement" behind the simple chat interfaces. In other words, when someone is browsing through QVC's website, LivePerson has done enough behavioral analytics to know just when to throw a pop-up box offering live assistance before the shopping cart gets abandoned.

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It's a solid business for a solid company, but apparently it's just not growing fast enough and the current quarter won't get any easier. LivePerson's guidance calls for an adjusted profit of no more than $0.09 a share on $41.5 million to $42 million in revenue. Analysts were targeting a profit of $0.10 a share on $44.65 million in revenue.

If LivePerson's behavioral analytics are up to snuff, now would be the ideal time for it to remind investors not to bail on the still promising growth company.

Other Things Worth Watching

• There's no slowing down the webhosting market. Rackspace (RAX) delivered another quarter of hearty growth after Tuesday's market close. Revenue and net income climbed 27% and 36%, respectively. Rackspace is a popular provider of website hosting. It also allows customers to use its growing fleet of servers for the hosting cloud-based applications.

• News Corp. (NWSA) may be a polarizing name for TV viewers as the parent company of Fox Broadcasting, but the one thing that isn't debatable is that Rupert Murdoch's company did clock in ahead of expectations. The media giant's adjusted profit of $0.43 a share was well ahead of the $0.37 a share that Wall Street was forecasting. Revenue inched 2% higher to $8.1 billion. Now that the election is over, will Fox -- and the other politically influenced broadcasters -- hold up without all of the campaign ads?

Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. Motley Fool newsletter services have recommended buying shares of Rackspace Hosting and LivePerson.


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