The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Entropic Communications beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share dropped to zero.
Margins shrank across the board.
Entropic Communications reported revenue of $89.8 million. The 14 analysts polled by S&P Capital IQ foresaw sales of $88.7 million on the same basis. GAAP reported sales were 75% higher than the prior-year quarter's $51.5 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 $0.09. The 13 earnings estimates compiled by S&P Capital IQ predicted $0.08 per share. GAAP EPS contracted to zero from the prior-year quarter's $0.05.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 49.0%, 630 basis points worse than the prior-year quarter. Operating margin was 2.6%, 970 basis points worse than the prior-year quarter. Net margin was 0.5%, 850 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $92.9 million. On the bottom line, the average EPS estimate is $0.08.
Next year's average estimate for revenue is $323.7 million. The average EPS estimate is $0.37.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 255 members out of 287 rating the stock outperform, and 32 members rating it underperform. Among 51 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 42 give Entropic Communications a green thumbs-up, and nine give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Entropic Communications is outperform, with an average price target of $7.45.
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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. 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.