The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Extreme Networks met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share shrank to a loss.
Margins dropped across the board.
Extreme Networks booked revenue of $75.6 million. The three analysts polled by S&P Capital IQ wanted to see a top line of $75.9 million on the same basis. GAAP reported sales were 8.8% lower than the prior-year quarter's $82.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.03. The three earnings estimates compiled by S&P Capital IQ predicted $0.03 per share. GAAP EPS were -$0.04 for Q2 versus $0.04 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 53.9%, 200 basis points worse than the prior-year quarter. Operating margin was 1.3%, 410 basis points worse than the prior-year quarter. Net margin was -5.6%, 1,060 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $70.7 million. On the bottom line, the average EPS estimate is $0.02.
Next year's average estimate for revenue is $299.7 million. The average EPS estimate is $0.16.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 112 members out of 119 rating the stock outperform, and seven members rating it underperform. Among 24 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 23 give Extreme Networks a green thumbs-up, and one give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Extreme Networks is outperform, with an average price target of $5.17.
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