The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Perfect World beat expectations on revenue and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share improved significantly.
Margins increased across the board.
Perfect World booked revenue of $122.7 million. The 12 analysts polled by S&P Capital IQ anticipated sales of $112.5 million on the same basis. GAAP reported sales were 37% higher than the prior-year quarter's $89.9 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 $0.90. The eight earnings estimates compiled by S&P Capital IQ predicted $0.55 per share on the same basis. GAAP EPS of $0.86 for Q4 were 139% higher than the prior-year quarter's $0.36 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 82.3%, 20 basis points better than the prior-year quarter. Operating margin was 28.4%, 690 basis points better than the prior-year quarter. Net margin was 33.5%, 1,240 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $116.5 million. On the bottom line, the average EPS estimate is $0.70.
Next year's average estimate for revenue is $500.2 million. The average EPS estimate is $2.94.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 464 members out of 494 rating the stock outperform, and 30 members rating it underperform. Among 104 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 97 give Perfect World a green thumbs-up, and seven give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Perfect World is outperform, with an average price target of $19.87.
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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.