LeapFrog Enterprises Outruns Estimates Again

LeapFrog Enterprises (NYSE: LF  ) reported earnings on Nov. 5. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), LeapFrog Enterprises beat expectations on revenues and crushed expectations on earnings per share.

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

Gross margins contracted, operating margins grew, net margins grew.

Revenue details
LeapFrog Enterprises notched revenue of $193.1 million. The seven analysts polled by S&P Capital IQ predicted revenue of $174.3 million on the same basis. GAAP reported sales were 28% higher than the prior-year quarter's $150.8 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 $0.60. The six earnings estimates compiled by S&P Capital IQ anticipated $0.42 per share. GAAP EPS of $0.62 for Q3 were 77% higher than the prior-year quarter's $0.35 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 40.0%, 100 basis points worse than the prior-year quarter. Operating margin was 19.1%, 260 basis points better than the prior-year quarter. Net margin was 21.6%, 630 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $216.8 million. On the bottom line, the average EPS estimate is $0.50.

Next year's average estimate for revenue is $534.2 million. The average EPS estimate is $0.67.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 267 members out of 318 rating the stock outperform, and 51 members rating it underperform. Among 70 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 56 give LeapFrog Enterprises a green thumbs-up, and 14 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on LeapFrog Enterprises is outperform, with an average price target of $14.80.

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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. Motley Fool newsletter services recommend LeapFrog Enterprises. 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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