The 10-second takeaway
For the quarter ended Dec. 31 (Q4), AboveNet met expectations on revenue and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share expanded.
Gross margin dropped, operating margin expanded, and net margin shrank.
AboveNet reported revenue of $121.6 million. The 10 analysts polled by S&P Capital IQ foresaw a top line of $120.9 million on the same basis. GAAP reported sales were 12% higher than the prior-year quarter's $108.1 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 $0.90. The 10 earnings estimates compiled by S&P Capital IQ predicted $0.61 per share. GAAP EPS of $0.90 for Q4 were 5.9% higher than the prior-year quarter's $0.85 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 63.8%, 80 basis points worse than the prior-year quarter. Operating margin was 26.8%, 270 basis points better than the prior-year quarter. Net margin was 19.8%, 80 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $125.2 million. On the bottom line, the average EPS estimate is $0.63.
Next year's average estimate for revenue is $525.5 million. The average EPS estimate is $2.77.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 42 members out of 48 rating the stock outperform, and six members rating it underperform. Among 15 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 14 give AboveNet 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 AboveNet is outperform, with an average price target of $73.15.
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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.