The 10-second takeaway
For the quarter ended Feb. 29 (Q1), Xyratex missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly, and GAAP earnings per share grew significantly.
Margins increased across the board.
Xyratex booked revenue of $295.7 million. The five analysts polled by S&P Capital IQ expected revenue of $316.5 million on the same basis. GAAP reported sales were 18% lower than the prior-year quarter's $360.5 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 $0.40. The five earnings estimates compiled by S&P Capital IQ predicted $0.26 per share on the same basis. GAAP EPS of $0.38 for Q1 were 153% higher than the prior-year quarter's $0.15 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 17.9%, 420 basis points better than the prior-year quarter. Operating margin was 3.6%, 280 basis points better than the prior-year quarter. Net margin was 3.7%, 240 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $337.2 million. On the bottom line, the average EPS estimate is $0.34.
Next year's average estimate for revenue is $1.37 billion. The average EPS estimate is $1.42.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 261 members rating the stock outperform and 22 members rating it underperform. Among 76 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 70 give Xyratex a green thumbs-up, and six give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Xyratex is outperform, with an average price target of $16.20.
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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.