From Standard & Poor's Equity Research
Raymond James downgraded Digital Insight (DGIN) to market perform from outperform, after the company posted 18 cents second quarter earnings per share (EPS) compared to 18 cents EPS during the same period last year.
Analyst Wayne Johnson says the company's 66 thousand second quarter on-line bill paying subscriber adds are well below his 125 thousand estimate. He says the management called the second quarter an anomaly but he feels they did not provide a satisfactory explanation. He notes that online bill pay customers generate 3 times to 4 times more revenue than standalone online banking users, and thus are the driving factor for EPS growth. He cut his $1.08 2006 cash EPS estimate to $1.06 and his $1.27 2007 EPS estimate to $1.23.