The 10-second takeaway
For the quarter ended May 31 (Q2), Xyratex beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly. Non-GAAP earnings per share shrank significantly. GAAP earnings per share dropped significantly.
Gross margins expanded, operating margins dropped, net margins dropped.
Xyratex logged revenue of $216.2 million. The three analysts polled by S&P Capital IQ expected to see revenue of $203.2 million on the same basis. GAAP reported sales were 33% lower than the prior-year quarter's $322.1 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 $0.10. The three earnings estimates compiled by S&P Capital IQ forecast -$0.05 per share. Non-GAAP EPS of $0.10 for Q2 were 69% lower than the prior-year quarter's $0.32 per share. GAAP EPS of $0.11 for Q2 were 54% lower than the prior-year quarter's $0.24 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 22.0%, 550 basis points better than the prior-year quarter. Operating margin was 2.0%, 50 basis points worse than the prior-year quarter. Net margin was 1.4%, 80 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $223.1 million. On the bottom line, the average EPS estimate is $0.13.
Next year's average estimate for revenue is $861.1 million. The average EPS estimate is $0.08.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 256 members out of 275 rating the stock outperform, and 19 members rating it underperform. Among 71 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 65 give Xyratex a green thumbs-up, and six give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Xyratex is outperform, with an average price target of $14.00.
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