Cbeyond Beats on EPS But GAAP Results Lag

Cbeyond (Nasdaq: CBEY  ) reported earnings on July 31. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Cbeyond met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank. GAAP earnings per share contracted to zero.

Margins shrank across the board.

Revenue details
Cbeyond notched revenue of $118.2 million. The 11 analysts polled by S&P Capital IQ anticipated revenue of $119.5 million on the same basis. GAAP reported sales were 4.5% lower than the prior-year quarter's $123.8 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 details
EPS came in at $0.00. The 11 earnings estimates compiled by S&P Capital IQ averaged -$0.05 per share. GAAP EPS shrank to zero from the prior-year quarter's $0.09.

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.

Margin details
For the quarter, gross margin was 66.6%, 90 basis points worse than the prior-year quarter. Operating margin was 0.4%, 440 basis points worse than the prior-year quarter. Net margin was 0.0%, 220 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $119.1 million. On the bottom line, the average EPS estimate is -$0.06.

Next year's average estimate for revenue is $478.0 million. The average EPS estimate is -$0.18.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 103 members out of 138 rating the stock outperform, and 35 members rating it underperform. Among 41 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 27 give Cbeyond 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 Cbeyond is hold, with an average price target of $9.14.

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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. The Motley Fool has no position in any of the stocks mentioned. 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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