The 10-second takeaway
For the quarter ended June 30 (Q3), Keynote Systems beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased. Non-GAAP earnings per share dropped significantly. GAAP earnings per share expanded.
Gross margins contracted, operating margins grew, net margins increased.
Keynote Systems logged revenue of $31.2 million. The five analysts polled by S&P Capital IQ hoped for a top line of $29.5 million on the same basis. GAAP reported sales were 3.1% higher than the prior-year quarter's $30.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
EPS came in at $0.15. The five earnings estimates compiled by S&P Capital IQ predicted $0.09 per share. Non-GAAP EPS of $0.15 for Q3 were 17% lower than the prior-year quarter's $0.18 per share. GAAP EPS of $0.01 for Q3 were much higher than the prior-year quarter's $0.00 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
For the quarter, gross margin was 46.1%, 50 basis points worse than the prior-year quarter. Operating margin was 4.0%, 400 basis points better than the prior-year quarter. Net margin was 0.5%, 40 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $31.7 million. On the bottom line, the average EPS estimate is $0.17.
Next year's average estimate for revenue is $124.7 million. The average EPS estimate is $0.69.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 92 members out of 103 rating the stock outperform, and 11 members rating it underperform. Among 22 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 19 give Keynote Systems a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Keynote Systems is hold, with an average price target of $17.60.
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