Avid Technology Hits Estimates in Solid Quarter

Avid Technology (Nasdaq: AVID  ) reported earnings on Oct. 29. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Avid Technology met expectations on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped significantly and GAAP loss per share increased.

Gross margins expanded, operating margins contracted, net margins shrank.

Revenue details
Avid Technology reported revenue of $127.2 million. The two analysts polled by S&P Capital IQ looked for a top line of $126.0 million on the same basis. GAAP reported sales were 23% lower than the prior-year quarter's $165.0 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at -$0.08. The two earnings estimates compiled by S&P Capital IQ averaged -$0.08 per share. GAAP EPS were -$0.45 for Q3 compared to -$0.21 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 53.7%, 10 basis points better than the prior-year quarter. Operating margin was -2.7%, 150 basis points worse than the prior-year quarter. Net margin was -13.7%, 880 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $148.3 million. On the bottom line, the average EPS estimate is $0.20.

Next year's average estimate for revenue is $585.5 million. The average EPS estimate is -$0.23.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 84 members out of 131 rating the stock outperform, and 47 members rating it underperform. Among 35 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 24 give Avid Technology a green thumbs-up, and 11 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Avid Technology is hold, with an average price target of $9.17.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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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  • Report this Comment On October 31, 2012, at 3:04 PM, smithersjones wrote:

    On what planet is this a "solid quarter"? They "met expectations" because they lowered them in a major way a week before the earnings release. They MISSED the quarter by a mile despite getting rid of nearly 50 percent of the workforce in July.

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