ZAGG Misses Where it Counts

ZAGG (Nasdaq: ZAGG  ) reported earnings on Nov. 1. Here are the numbers you need to know.

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

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share grew significantly.

Gross margins expanded, operating margins dropped, net margins increased.

Revenue details
ZAGG reported revenue of $59.8 million. The six analysts polled by S&P Capital IQ predicted revenue of $60.7 million on the same basis. GAAP reported sales were 30% higher than the prior-year quarter's $45.9 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 $0.11. The six earnings estimates compiled by S&P Capital IQ anticipated $0.16 per share. GAAP EPS of $0.11 for Q3 were 57% higher than the prior-year quarter's $0.07 per share.

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 44.5%, 210 basis points better than the prior-year quarter. Operating margin was 11.9%, 70 basis points worse than the prior-year quarter. Net margin was 5.7%, 80 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $80.9 million. On the bottom line, the average EPS estimate is $0.26.

Next year's average estimate for revenue is $258.8 million. The average EPS estimate is $0.77.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 258 members out of 365 rating the stock outperform, and 107 members rating it underperform. Among 75 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 20 give ZAGG a green thumbs-up, and 55 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on ZAGG is outperform, with an average price target of $14.54.

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.


Read/Post Comments (19) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 02, 2012, at 1:11 PM, yupppie wrote:

    Hey Seth,

    The 10 second takeaway is that this article was probably written in under 10 seconds. Contrary to your statement in the opening paragraph, ZAGG beat earnings at $0.26/share and slightly missed on revenue. Please take the time to make sure you are correct when you write for esteemed sights such as MF. Unless of course this error was intentional, as so many headlines/articles related to ZAGG's earnings results tend to be nowadays.

    -Yupppie

  • Report this Comment On November 02, 2012, at 1:12 PM, yupppie wrote:

    EXCUSE ME, sites

  • Report this Comment On November 02, 2012, at 1:19 PM, agp424s wrote:

    No kidding! Your numbers are completely wrong! You're writing a financial article and you don't even know that analysts estimates are based on non-GAAP? Your showing the Non-GAAP estimates, but the GAAP results, which shows they missed by $.06 when they actually beat by $.10.

    Like Yuppie said above, unless of course this was intentional to short and distort. Freaking ridiculous! Motley Fool is total crap!

  • Report this Comment On November 02, 2012, at 1:32 PM, Nadiacashinin wrote:

    I used to respect Motley, now they're more like Seeking Alpha publish any thing from anyone.

  • Report this Comment On November 02, 2012, at 1:33 PM, Nadiacashinin wrote:

    Hey Seth, maybe you could put out a correction... just a thought?

  • Report this Comment On November 02, 2012, at 1:46 PM, agp424s wrote:

    I highly doubt that's going to happen...

  • Report this Comment On November 02, 2012, at 1:47 PM, agp424s wrote:

    I'm reporting this crap....clearly intentional!!

  • Report this Comment On November 02, 2012, at 2:20 PM, RP65 wrote:

    This crap is getting old. I hope you do report this!

    Some folks don't seem to think there are any consequences to their actions when they get it wrong and cost allot of investors dollars.

  • Report this Comment On November 02, 2012, at 2:45 PM, sophrosyns wrote:

    I blame MF for hiring business majors in high school to writer their financial news, hence the reason that get their facts so blatantly wrong. Problem is there are a lot of fools out there that actaully use info from MF to make decisions. It also seems very suspicious that pseudo financial reporting sites such as MF always provide incorrect information regarding ZAGG's quarterly reports. This is three quarters in a row that this has happened.

  • Report this Comment On November 02, 2012, at 2:49 PM, loosecannon102 wrote:

    Motley Fool is strictly amateur hour now. Did this guy get paid to write this crap? Don't ever forget that Motley Fool was the same outfit that advised you to put all your dough in Krispy Kreme -- pun intended. What a joke. Thanks, Dave and Tom.

  • Report this Comment On November 02, 2012, at 2:56 PM, RP65 wrote:

    Your dead on Sophrosyns. It would sure make one ponder there is an Intentional effort to run the price of Zagg down. Last quarter this same thing happened and the stock took a huge hit. The next day a correction was printed but the damage was already done. Zagg has it's problems but this is something else.

  • Report this Comment On November 02, 2012, at 3:34 PM, shadowlesstruth wrote:

    At least we know who Zagg will be suing next. A co-advisor who doesn't know what eps is, TMF should be ashamed. Apparently the street wasn't listening when Zagg projected 40% growth in 2013, 60 million above revenue forcasts.

  • Report this Comment On November 02, 2012, at 4:33 PM, yupppie wrote:

    Just some fools. Fact.

  • Report this Comment On November 03, 2012, at 9:51 AM, Honestycheck wrote:

    Seth, you are mixing GAAP and Non-GAAP estimates. Zagg in fact beat estimates by a whopping $.10. Based on your profile your glaring mis-report does not come from a lack of understanding of basic principles of earnings reporting. I can only assume that you are abetting someone who needs to spread lies because the truth will destroy them. It's tough enough to win honestly even without high profile broadcasts of misinformation like this. I definitely will be reporting this. In the meanwhile do yourself a favor and correct this blatant misrepresentation.

  • Report this Comment On November 03, 2012, at 10:05 AM, Honestycheck wrote:

    TMF never gets you billing address wrong

  • Report this Comment On November 03, 2012, at 8:50 PM, tjcfirebird wrote:

    I agree. It is unbelievable the the MF could have made such a huge mistake on the erroneous report of ZAGG's earnings. I believe it was intentional since they are now on record of making it a habit of falsely reporting ZAGG's financial results. I'm sure they will make a half hearted apology about their gross mistake in a day or two, after the damage has been done. I believe that the MF is being paid to misreport on Zagg quarter after quarter. ZAGG should seriously consider a law suit against the FOOLS since they continuously mis report on ZAGG. They are a pathetic bunch of fools for sure!

  • Report this Comment On November 03, 2012, at 8:57 PM, tjcfirebird wrote:

    This is the third quarter in a row that TMF has provided incorrect information on ZAGG's results! Look suspicious? You bet it is!

  • Report this Comment On November 05, 2012, at 9:56 AM, loosecannon102 wrote:

    Dear Tom and Dave Gardner -- you absolutely suck. How's that for reporting accurate results?

  • Report this Comment On November 08, 2012, at 9:41 PM, redwoodfalls wrote:

    Why aren't we hearing a response from the "Fool"??

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