The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Demand Media beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share grew.
Margins expanded across the board.
Demand Media logged revenue of $98.1 million. The 11 analysts polled by S&P Capital IQ wanted to see revenue of $94.3 million on the same basis. GAAP reported sales were 20% higher than the prior-year quarter's $81.5 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 $0.11. The 13 earnings estimates compiled by S&P Capital IQ anticipated $0.10 per share. GAAP EPS were $0.04 for Q3 versus -$0.05 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 52.6%, 180 basis points better than the prior-year quarter. Operating margin was 4.6%, 790 basis points better than the prior-year quarter. Net margin was 3.2%, 830 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $98.0 million. On the bottom line, the average EPS estimate is $0.11.
Next year's average estimate for revenue is $368.6 million. The average EPS estimate is $0.36.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 33 members out of 66 rating the stock outperform, and 33 members rating it underperform. Among 28 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), nine give Demand Media a green thumbs-up, and 19 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Demand Media is hold, with an average price target of $12.50.
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