The 10-second takeaway
For the quarter ended March 31 (Q3), ShoreTel beat slightly on revenues and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded and GAAP loss per share improved.
Margins contracted across the board.
ShoreTel logged revenue of $56.3 million. The nine analysts polled by S&P Capital IQ expected to see revenue of $55.5 million on the same basis. GAAP reported sales were 9.2% higher than the prior-year quarter's $51.6 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at -$0.03. The eight earnings estimates compiled by S&P Capital IQ anticipated -$0.04 per share. GAAP EPS were -$0.17 for Q3 compared to -$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 66.2%, 180 basis points worse than the prior-year quarter. Operating margin was -8.9%, 350 basis points worse than the prior-year quarter. Net margin was -15.1%, 1,050 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $64.1 million. On the bottom line, the average EPS estimate is $0.03.
Next year's average estimate for revenue is $232.6 million. The average EPS estimate is $0.00.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 122 members out of 130 rating the stock outperform, and eight members rating it underperform. Among 30 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 30 give ShoreTel a green thumbs-up, and give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on ShoreTel is outperform, with an average price target of $8.44.
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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.