The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Digital Generation missed estimates on revenues and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP loss per share grew.
Margins dropped across the board.
Digital Generation booked revenue of $93.8 million. The seven analysts polled by S&P Capital IQ predicted a top line of $95.9 million on the same basis. GAAP reported sales were 11% higher than the prior-year quarter's $84.6 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 -$7.96. The seven earnings estimates compiled by S&P Capital IQ predicted $0.06 per share. GAAP EPS were -$7.96 for Q3 compared to -$0.15 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 63.5%, 310 basis points worse than the prior-year quarter. Operating margin was 9.2%, 660 basis points worse than the prior-year quarter. Net margin was -234.2%, 22,940 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $110.7 million. On the bottom line, the average EPS estimate is $0.27.
Next year's average estimate for revenue is $395.8 million. The average EPS estimate is $0.38.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 247 members out of 260 rating the stock outperform, and 13 members rating it underperform. Among 47 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 45 give Digital Generation 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 Digital Generation is outperform, with an average price target of $16.43.
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