The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Archipelago Learning beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased, and GAAP earnings per share grew significantly.
Margins increased across the board.
Archipelago Learning chalked up revenue of $19.5 million. The one analyst polled by S&P Capital IQ expected revenue of $18.4 million on the same basis. GAAP reported sales were 14% higher than the prior-year quarter's $17.1 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 $0.27. The one earnings estimate compiled by S&P Capital IQ predicted $0.03 per share. GAAP EPS of $0.27 for Q4 were 440% higher than the prior-year quarter's $0.05 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 91.1%, 30 basis points better than the prior-year quarter. Operating margin was 15.4%, 1,790 basis points better than the prior-year quarter. Net margin was 36.9%, 2,880 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $19.2 million. On the bottom line, the average EPS estimate is $0.07.
Next year's average estimate for revenue is $80.8 million. The average EPS estimate is $0.32.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 11 members rating the stock outperform and 11 members rating it underperform. Among eight CAPS All-Star picks (recommendations by the highest-ranked CAPS members), five give Archipelago Learning 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 Archipelago Learning is hold, with an average price target of $10.50.
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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.