The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Syntel beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share improved significantly.
Margins improved across the board.
Syntel reported revenue of $172.4 million. The 10 analysts polled by S&P Capital IQ expected a top line of $169.0 million on the same basis. GAAP reported sales were 19% higher than the prior-year quarter's $144.9 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 $1.01. The five earnings estimates compiled by S&P Capital IQ anticipated $0.82 per share on the same basis. GAAP EPS of $1.05 for Q4 were 48% higher than the prior-year quarter's $0.71 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 42.1%, 370 basis points better than the prior-year quarter. Operating margin was 30.7%, 980 basis points better than the prior-year quarter. Net margin was 25.5%, 500 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $171.5 million. On the bottom line, the average EPS estimate is $0.78.
Next year's average estimate for revenue is $734.3 million. The average EPS estimate is $3.31.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 174 members out of 185 rating the stock outperform, and 12 members rating it underperform. Among 67 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 64 give Syntel a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Syntel is outperform, with an average price target of $57.11.
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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.