Magic Software Enterprises Beats on Both Top and Bottom Lines

Just the facts, Fool.

Seth Jayson
Seth Jayson
May 7, 2012 at 12:00AM
Other

Magic Software Enterprises (Nasdaq: MGIC) reported earnings on May 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Magic Software Enterprises beat expectations on revenues and earnings per share.

Compared with the prior-year quarter, revenue improved significantly and GAAP earnings per share grew significantly.

Margins improved across the board.

Revenue details
Magic Software Enterprises notched revenue of $30.0 million. The two analysts polled by S&P Capital IQ foresaw revenue of $29.3 million on the same basis. GAAP reported sales were 18% higher than the prior-year quarter's $25.5 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.12. The two earnings estimates compiled by S&P Capital IQ predicted $0.10 per share. GAAP EPS of $0.11 for Q1 were 38% higher than the prior-year quarter's $0.08 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 43.7%, 320 basis points better than the prior-year quarter. Operating margin was 14.1%, 180 basis points better than the prior-year quarter. Net margin was 14.0%, 180 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $31.5 million. On the bottom line, the average EPS estimate is $0.12.

Next year's average estimate for revenue is $128.2 million. The average EPS estimate is $0.49.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 124 members out of 131 rating the stock outperform, and seven members rating it underperform. Among 14 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 12 give Magic Software Enterprises a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Magic Software Enterprises is outperform, with an average price target of $9.50.

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