The 10-second takeaway
For the quarter ended Jan. 29 (Q1), Avago Technologies beat slightly on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded slightly and GAAP earnings per share expanded.
Gross margin contracted, operating margin dropped, and net margin grew.
Avago Technologies logged revenue of $563.0 million. The 12 analysts polled by S&P Capital IQ predicted sales of $552.5 million on the same basis. GAAP reported sales were 2.4% higher than the prior-year quarter's $550.0 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.62. The 10 earnings estimates compiled by S&P Capital IQ predicted $0.58 per share on the same basis. GAAP EPS of $0.50 for Q1 were 4.2% higher than the prior-year quarter's $0.48 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 50.3%, 150 basis points worse than the prior-year quarter. Operating margin was 23.4%, 240 basis points worse than the prior-year quarter. Net margin was 22.2%, 60 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $575.5 million. On the bottom line, the average EPS estimate is $0.62.
Next year's average estimate for revenue is $2.40 billion. The average EPS estimate is $2.60.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 83 members out of 89 rating the stock outperform, and six members rating it underperform. Among 27 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 26 give Avago Technologies a green thumbs-up, and one gives 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 $38.13.
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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.