The 10-second takeaway
For the quarter ended June 30 (Q4), ShoreTel beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP loss per share grew.
Margins dropped across the board.
ShoreTel booked revenue of $78.5 million. The seven analysts polled by S&P Capital IQ hoped for sales of $74.2 million on the same basis. GAAP reported sales were 39% higher than the prior-year quarter's $56.5 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 $0.00. The six earnings estimates compiled by S&P Capital IQ predicted -$0.03 per share. GAAP EPS were -$0.09 for Q4 against -$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 60.9%, 470 basis points worse than the prior-year quarter. Operating margin was -5.5%, 270 basis points worse than the prior-year quarter. Net margin was -6.4%, 330 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $73.8 million. On the bottom line, the average EPS estimate is -$0.03.
Next year's average estimate for revenue is $322.1 million. The average EPS estimate is $0.00.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 127 members out of 135 rating the stock outperform, and eight members rating it underperform. Among 27 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 27 give ShoreTel a green thumbs-up, and give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on ShoreTel is buy, with an average price target of $8.17.
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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, 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.