The 10-second takeaway
For the quarter ended March 31 (Q1), Mellanox Technologies beat expectations on revenue and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share improved.
Margins grew across the board.
Mellanox Technologies logged revenue of $88.7 million. The 11 analysts polled by S&P Capital IQ predicted revenue of $81.6 million on the same basis. GAAP reported sales were 61% higher than the prior-year quarter's $55.1 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 $0.51. The 10 earnings estimates compiled by S&P Capital IQ anticipated $0.33 per share on the same basis. GAAP EPS were $0.29 for Q1 against -$0.05 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 67.4%, 270 basis points better than the prior-year quarter. Operating margin was 14.9%, 1,000 basis points better than the prior-year quarter. Net margin was 14.0%, 1,690 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $83.5 million. On the bottom line, the average EPS estimate is $0.32.
Next year's average estimate for revenue is $343.7 million. The average EPS estimate is $1.54.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 142 members out of 154 rating the stock outperform, and 12 members rating it underperform. Among 44 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 40 give Mellanox Technologies a green thumbs-up, and four give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Mellanox Technologies is outperform, with an average price target of $39.82.
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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.