The 10-second takeaway
For the quarter ended Dec. 31 (Q3), CA Technologies beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue improved and earnings per share increased significantly.
Margins improved across the board.
CA Technologies reported revenue of $1.3 billion. The 13 analysts polled by S&P Capital IQ anticipated revenue of $1.2 billion. Sales were 8.4% higher than the prior-year quarter's $1.2 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.65. The 14 earnings estimates compiled by S&P Capital IQ forecast $0.54 per share on the same basis. GAAP EPS of $0.54 for Q3 were 38% higher than the prior-year quarter's $0.39 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 87.3%, 90 basis points better than the prior-year quarter. Operating margin was 32.7%, 390 basis points better than the prior-year quarter. Net margin was 20.8%, 360 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1.2 billion. On the bottom line, the average EPS estimate is $0.53.
Next year's average estimate for revenue is $4.8 billion. The average EPS estimate is $2.22.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 172 members out of 240 rating the stock outperform, and 68 members rating it underperform. Among 91 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 65 give CA Technologies a green thumbs-up, and 26 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on CA Technologies is outperform, with an average price target of $24.55.
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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.