The 10-second takeaway
For the quarter ended March 31 (Q1), ReachLocal beat slightly on revenues and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly, while GAAP loss per share contracted.
Margins increased across the board.
ReachLocal reported revenue of $104.0 million. The seven analysts polled by S&P Capital IQ expected to see net sales of $102.8 million on the same basis. GAAP-reported sales were 24% higher than the prior-year quarter's $84.1 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 seven earnings estimates compiled by S&P Capital IQ averaged -$0.06 per share. GAAP EPS were -$0.03 for Q1, versus -$0.12 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 49.6%, 250 basis points better than the prior-year quarter. Operating margin was -1.0%, 260 basis points better than the prior-year quarter. Net margin was -1%, 310 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $108.5 million. On the bottom line, the average EPS estimate is -$0.03.
Next year's average estimate for revenue is $441.5 million. The average EPS estimate is -$0.10.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 75 members rating the stock outperform and three members rating it underperform. Among 24 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 23 give ReachLocal 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 ReachLocal is outperform, with an average price target of $11.71.
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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. Motley Fool newsletter services have recommended buying shares of ReachLocal. 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.
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