The 10-second takeaway
For the quarter ended Feb. 29 (Q2), EXFO missed estimates on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue contracted, and GAAP earnings per share dropped.
Gross margins increased, operating margins contracted, and net margins shrank.
EXFO tallied revenue of $66.9 million. The six analysts polled by S&P Capital IQ looked for net sales of $68.6 million on the same basis. GAAP reported sales were 7.1% lower than the prior-year quarter's $72 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 $0.06. The five earnings estimates compiled by S&P Capital IQ forecast $0.08 per share on the same basis. GAAP EPS of $0.02 for Q2 were 33% lower than the prior-year quarter's $0.03 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 64.7%, 330 basis points better than the prior-year quarter. Operating margin was 5.7%, 370 basis points worse than the prior-year quarter. Net margin was 1.6%, 70 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $71.6 million. On the bottom line, the average EPS estimate is $0.09.
Next year's average estimate for revenue is $282.9 million. The average EPS estimate is $0.33.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 162 members rating the stock outperform and 11 members rating it underperform. Among 36 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 34 give EXFO a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on EXFO is hold, with an average price target of $7.65.
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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. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.