The 10-second takeaway
For the quarter ended Sep. 30 (Q3), STEC beat expectations on revenues and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank significantly and GAAP earnings per share contracted to a loss.
Margins dropped across the board.
STEC logged revenue of $42.1 million. The nine analysts polled by S&P Capital IQ foresaw a top line of $40.8 million on the same basis. GAAP reported sales were 42% lower than the prior-year quarter's $72.5 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 -$0.24. The eight earnings estimates compiled by S&P Capital IQ anticipated -$0.28 per share. GAAP EPS were -$0.42 for Q3 versus $0.09 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 37.0%, 850 basis points worse than the prior-year quarter. Operating margin was -50.9%, 5,820 basis points worse than the prior-year quarter. Net margin was -47.0%, 5,370 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $45.3 million. On the bottom line, the average EPS estimate is -$0.22.
Next year's average estimate for revenue is $177.2 million. The average EPS estimate is -$0.95.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on STEC is hold, with an average price target of $7.40.
Looking to profit from the makers of computer hardware? You may be missing something obvious about where the money will be made in the tech industry of the future. Is STEC on the right side of the revolution? Check out the changing landscape and meet the company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.
- Add STEC to My Watchlist.
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.