The 10-second takeaway
For the quarter ended May 31 (Q2), Xyratex missed slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted and GAAP earnings per share improved.
Margins increased across the board.
Xyratex chalked up revenue of $322.1 million. The five analysts polled by S&P Capital IQ anticipated revenue of $327.0 million on the same basis. GAAP reported sales were 4.9% lower than the prior-year quarter's $338.5 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 $0.32. The four earnings estimates compiled by S&P Capital IQ predicted $0.29 per share. GAAP EPS were $0.24 for Q2 versus -$0.15 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 16.5%, 360 basis points better than the prior-year quarter. Operating margin was 2.5%, 410 basis points better than the prior-year quarter. Net margin was 2.2%, 350 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $344.5 million. On the bottom line, the average EPS estimate is $0.55.
Next year's average estimate for revenue is $1.29 billion. The average EPS estimate is $1.76.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 259 members rating the stock outperform and 24 members rating it underperform. Among 69 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 61 give Xyratex 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 Xyratex is hold, with an average price target of $17.50.
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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.