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Leap Wireless International Meets on the Top Line, Misses Where it Counts

Leap Wireless International (Nasdaq: LEAP  ) reported earnings on Nov. 7. Here are the numbers you need to know.

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

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

Gross margins dropped, operating margins dropped, net margins grew.

Revenue details
Leap Wireless International notched revenue of $774.0 million. The 21 analysts polled by S&P Capital IQ expected sales of $774.6 million on the same basis. GAAP reported sales were 1.4% higher than the prior-year quarter's $763.3 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 -$1.14. The 20 earnings estimates compiled by S&P Capital IQ averaged -$0.74 per share. GAAP EPS were $0.32 for Q3 against -$0.90 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 39.2%, 230 basis points worse than the prior-year quarter. Operating margin was -4.2%, 530 basis points worse than the prior-year quarter. Net margin was 3.2%, 1,220 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $784.5 million. On the bottom line, the average EPS estimate is -$1.17.

Next year's average estimate for revenue is $3.17 billion. The average EPS estimate is -$3.72.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 181 members out of 232 rating the stock outperform, and 51 members rating it underperform. Among 43 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 32 give Leap Wireless International 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 Leap Wireless International is hold, with an average price target of $6.05.

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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