The 10-second takeaway
For the quarter ended Dec. 31 (Q3), NetScout Systems beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased, and earnings per share dropped.
Gross margins improved, operating margins improved, and net margins dropped.
NetScout Systems logged revenue of $83 million. The 14 analysts polled by S&P Capital IQ predicted revenue of $82 million. Sales were 9.1% higher than the prior-year quarter's $76 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.35. The 13 earnings estimates compiled by S&P Capital IQ anticipated $0.33 per share on the same basis. GAAP EPS of $0.24 for Q3 were 7.7% lower than the prior-year quarter's $0.26 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 79.3%, 40 basis points better than the prior-year quarter. Operating margin was 21.4%, 10 basis points better than the prior-year quarter. Net margin was 12.0%, 250 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $86 million. On the bottom line, the average EPS estimate is $0.37.
Next year's average estimate for revenue is $304 million. The average EPS estimate is $1.07.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 120 members out of 131 rating the stock outperform, and 11 members rating it underperform. Among 32 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 30 give NetScout Systems a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on NetScout Systems is outperform, with an average price target of $19.08.
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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. 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.