The 10-second takeaway
For the quarter ended March 31 (Q1), iGATE missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share expanded significantly.
Margins dropped across the board.
iGATE tallied revenue of $263.3 million. The seven analysts polled by S&P Capital IQ looked for net sales of $270.5 million on the same basis. GAAP reported sales were much higher than the prior-year quarter's $75.8 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 $0.38. The six earnings estimates compiled by S&P Capital IQ predicted $0.32 per share on the same basis. GAAP EPS of $0.29 for Q1 were 45% higher than the prior-year quarter's $0.20 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 40.2%, 70 basis points worse than the prior-year quarter. Operating margin was 18.3%, 330 basis points worse than the prior-year quarter. Net margin was 9.1%, 1,460 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $273.6 million. On the bottom line, the average EPS estimate is $0.30.
Next year's average estimate for revenue is $1.13 billion. The average EPS estimate is $1.46.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 210 members out of 217 rating the stock outperform, and seven members rating it underperform. Among 46 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 44 give iGATE 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 iGATE is outperform, with an average price target of $22.14.
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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.