The 10-second takeaway
For the quarter ended April 30 (Q3), Aruba Networks met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share grew significantly.
Margins expanded across the board.
Aruba Networks logged revenue of $131.9 million. The 20 analysts polled by S&P Capital IQ hoped for revenue of $131.6 million on the same basis. GAAP reported sales were 25% higher than the prior-year quarter's $105.8 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 $0.16. The 19 earnings estimates compiled by S&P Capital IQ forecast $0.16 per share. GAAP EPS of $0.05 for Q3 were 67% higher than the prior-year quarter's $0.03 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 70.0%, 230 basis points better than the prior-year quarter. Operating margin was 2.5%, 480 basis points better than the prior-year quarter. Net margin was 4.6%, 160 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $137.4 million. On the bottom line, the average EPS estimate is $0.17.
Next year's average estimate for revenue is $515.1 million. The average EPS estimate is $0.63.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 290 members rating the stock outperform and 31 members rating it underperform. Among 71 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 61 give Aruba Networks a green thumbs-up, and 10 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Aruba Networks is outperform, with an average price target of $26.28.
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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.