The 10-second takeaway
For the quarter ended July 29 (Q3), Avago Technologies beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue was unchanged and GAAP earnings per share grew.
Gross margins dropped, operating margins expanded, net margins were steady.
Avago Technologies chalked up revenue of $606.0 million. The 13 analysts polled by S&P Capital IQ expected sales of $599.3 million on the same basis. GAAP reported sales were 0.5% higher than the prior-year quarter's $603.0 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 $0.72. The 14 earnings estimates compiled by S&P Capital IQ predicted $0.66 per share. GAAP EPS of $0.58 for Q3 were 1.8% higher than the prior-year quarter's $0.57 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 51.0%, 60 basis points worse than the prior-year quarter. Operating margin was 24.9%, 50 basis points better than the prior-year quarter. Net margin was 23.9%, about the same as the prior-year quarter.
Next quarter's average estimate for revenue is $626.3 million. On the bottom line, the average EPS estimate is $0.72.
Next year's average estimate for revenue is $2.37 billion. The average EPS estimate is $2.66.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 84 members out of 89 rating the stock outperform, and five members rating it underperform. Among 21 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 21 give Avago Technologies 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 Avago Technologies is outperform, with an average price target of $40.67.
Is Avago Technologies the best semiconductor stock for you? You may be missing something obvious. Check out the semiconductor company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.
- Add Avago Technologies to My Watchlist.
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.