The 10-second takeaway
For the quarter ended Sep. 30 (Q1), Extreme Networks missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share expanded significantly.
Gross margins dropped, operating margins dropped, net margins increased.
Extreme Networks logged revenue of $76.1 million. The three analysts polled by S&P Capital IQ foresaw sales of $78.6 million on the same basis. GAAP reported sales were 3.5% lower than the prior-year quarter's $78.9 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 $0.04. The three earnings estimates compiled by S&P Capital IQ averaged $0.03 per share. GAAP EPS of $0.14 for Q1 were much higher than the prior-year quarter's $0.02 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 52.5%, 270 basis points worse than the prior-year quarter. Operating margin was 2.7%, 80 basis points worse than the prior-year quarter. Net margin was 17.0%, 1,500 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $83.5 million. On the bottom line, the average EPS estimate is $0.06.
Next year's average estimate for revenue is $331.5 million. The average EPS estimate is $0.20.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 115 members out of 122 rating the stock outperform, and seven members rating it underperform. Among 25 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 23 give Extreme Networks 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 Extreme Networks is outperform, with an average price target of $5.00.
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