Shares in specialty end-to-end networks provider InterCloud Systems, Inc. (ICLD) , formerly Genesis Group Holdings, Inc., spiked on Monday, breaking through resistance and, well, pretty much any other technical barrier you can think of. The gains, which reached as high as 76 percent before retreating to around 50 percent in the early afternoon, combined with Friday’s 270 percent jump to mean the company has almost sextupled in value (up over 475 percent) since the release of its Q3 earnings report.
Working primarily in the telecom industry, InterCloud constructs, engineers, installs, and maintains outsourced networks and infrastructure systems.
Revenues Rapidly Climbing
The earnings report, released after market close on Thursday, showed rapid revenue growth for InterCloud stemming from its acquisition of companies earlier in the year. Revenue increased $13.2 million year-over-year to $16.2 million, a 448 percent gain. Diluted earnings per share of $0.12 was a major boost, year-over-year, from 2012’s $2.16 per share loss.
The nine months ending on September 30 also show major gains for InterCloud, with revenue up 631 percent to $42.9 million.
"Our third quarter results reflect the integration of our completed acquisitions, and the success of InterCloud's cross selling plan," said CEO Mark Munro. "InterCloud now offers a full set of cloud and managed services as well as professional services focused on providing end-to-end network solutions for both carriers and enterprises. We continue to be well positioned for growth into 2014."
InterCloud has been on a buying spree for a year, purchasing T N S Inc. and the ADEX Corporation in September 2012 and AW Solutions, Inc. in April of this year.
Gains from Earnings?
Along with the earnings report, the sheer size of the leap can be at least partially attributed to a somewhat depressed share price after the company made a $5 million public offering at the end of October. However, while the earnings report for InterCloud system showed big growth, and it’s clear that the rocketing share prices were sparked by the Q3 report, it’s less clear why this earnings report, specifically, sparked such fervor from investors.
While revenue is way up over 2012 numbers, this is the fourth straight quarter that revenue exceeded $10 million. Each quarter has shown steady increases ($11.36 million in Q4 2012, $12.4 million in Q1 2013, $14.36 million in Q2 2013), but the quarter-over-quarter gain in revenue was a more-modest 12.8 percent.
One possible reason why the market appears to just now be reacting to InterCloud’s year-long trend of soaring revenue is the positive earnings, representing only the second time in the last six quarters the company turned a profit and the previous time, Q4 of 2012, was driven largely by tax gains.
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