The 10-second takeaway
For the quarter ended June 30 (Q2), Acme Packet met expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank significantly and GAAP earnings per share dropped to zero.
Margins contracted across the board.
Acme Packet tallied revenue of $67.6 million. The 19 analysts polled by S&P Capital IQ predicted revenue of $67.3 million on the same basis. GAAP reported sales were 15% lower than the prior-year quarter's $79.7 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 $0.13. The 20 earnings estimates compiled by S&P Capital IQ forecast $0.13 per share. GAAP EPS dropped to zero from the prior-year quarter's $0.20.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 80.1%, 250 basis points worse than the prior-year quarter. Operating margin was -0.2%, 2,850 basis points worse than the prior-year quarter. Net margin was -0.2%, 1,780 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $74.0 million. On the bottom line, the average EPS estimate is $0.18.
Next year's average estimate for revenue is $296.5 million. The average EPS estimate is $0.72.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 498 members out of 569 rating the stock outperform, and 71 members rating it underperform. Among 135 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 120 give Acme Packet a green thumbs-up, and 15 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Acme Packet is hold, with an average price target of $30.19.
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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. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend 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.