The 10-second takeaway
For the quarter ended March 31 (Q1), Acme Packet beat expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share contracted significantly.
Margins dropped across the board.
Acme Packet reported revenue of $70.8 million. The 19 analysts polled by S&P Capital IQ hoped for a top line of $69.3 million on the same basis. GAAP reported sales were 4.2% lower than the prior-year quarter's $74.0 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 $0.17. The 17 earnings estimates compiled by S&P Capital IQ averaged $0.17 per share. GAAP EPS of $0.03 for Q1 were 84% lower than the prior-year quarter's $0.19 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 80.3%, 220 basis points worse than the prior-year quarter. Operating margin was 6.2%, 2,280 basis points worse than the prior-year quarter. Net margin was 3.4%, 1,510 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $75.6 million. On the bottom line, the average EPS estimate is $0.20.
Next year's average estimate for revenue is $332.0 million. The average EPS estimate is $0.98.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 499 members out of 571 rating the stock outperform, and 73 members rating it underperform. Among 153 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 140 give Acme Packet a green thumbs-up, and 13 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Acme Packet is outperform, with an average price target of $31.06.
Internet software and services are being consumed in radically different ways, on increasingly mobile devices. Does Acme Packet fit in anymore? Check out the company that Motley Fool analysts expect to lead the pack in "The Next Trillion-dollar Revolution." Click here for instant access to this free report.
- Add Acme Packet 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. Motley Fool newsletter services have recommended buying shares of Acme Packet. 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.