The 10-second takeaway
For the quarter ended March 31 (Q1), Cavium met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted significantly and GAAP earnings per share dropped to a loss.
Margins dropped across the board.
Cavium logged revenue of $52.7 million. The 21 analysts polled by S&P Capital IQ predicted a top line of $52.6 million on the same basis. GAAP reported sales were 17% lower than the prior-year quarter's $63.6 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 $0.02. The 22 earnings estimates compiled by S&P Capital IQ anticipated $0.01 per share. GAAP EPS were -$0.28 for Q1 versus $0.03 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 46.9%, 1,400 basis points worse than the prior-year quarter. Operating margin was -28.1%, 3,300 basis points worse than the prior-year quarter. Net margin was -26.2%, 2,850 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $56.4 million. On the bottom line, the average EPS estimate is $0.06.
Next year's average estimate for revenue is $242.5 million. The average EPS estimate is $0.42.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 81 members out of 110 rating the stock outperform, and 29 members rating it underperform. Among 45 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 37 give Cavium a green thumbs-up, and eight give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Cavium is outperform, with an average price target of $33.23.
Is Cavium the best semiconductor stock for you? You may be missing something obvious. Check out the semiconductor company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.
- Add Cavium to My Watchlist.
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.