The 10-second takeaway
For the quarter ended March 31 (Q1), Websense met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew slightly and GAAP earnings per share dropped to a loss.
Gross margins expanded, operating margins expanded, and net margins dropped.
Websense chalked up revenue of $89.5 million. The 13 analysts polled by S&P Capital IQ wanted to see revenue of $89.6 million on the same basis. GAAP reported sales were 1.0% higher than the prior-year quarter's $88.6 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 $0.36. The 14 earnings estimates compiled by S&P Capital IQ predicted $0.33 per share on the same basis. GAAP EPS were -$0.05 for Q1 versus $0.20 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 84.2%, 70 basis points better than the prior-year quarter. Operating margin was 12.0%, 320 basis points better than the prior-year quarter. Net margin was -2.0%, 1,120 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $91.5 million. On the bottom line, the average EPS estimate is $0.37.
Next year's average estimate for revenue is $368.4 million. The average EPS estimate is $1.55.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 85 members out of 104 rating the stock outperform, and 19 members rating it underperform. Among 24 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 23 give Websense a green thumbs-up, and one gives it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Websense is hold, with an average price target of $19.89.
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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.