The 10-second takeaway
For the quarter ended Sep. 28 (Q4), Dolby Laboratories beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share shrank significantly.
Margins contracted across the board.
Dolby Laboratories recorded revenue of $224.8 million. The nine analysts polled by S&P Capital IQ wanted to see revenue of $209.9 million on the same basis. GAAP reported sales were 7.8% lower than the prior-year quarter's $243.8 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 $0.61. The seven earnings estimates compiled by S&P Capital IQ predicted $0.53 per share. GAAP EPS of $0.49 for Q4 were 32% lower than the prior-year quarter's $0.72 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 88.0%, 150 basis points worse than the prior-year quarter. Operating margin was 31.8%, 1,530 basis points worse than the prior-year quarter. Net margin was 22.9%, 950 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $224.8 million. On the bottom line, the average EPS estimate is $0.61.
Next year's average estimate for revenue is $909.1 million. The average EPS estimate is $2.68.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 3,971 members out of 4,066 rating the stock outperform, and 95 members rating it underperform. Among 1,082 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,067 give Dolby Laboratories a green thumbs-up, and 15 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Dolby Laboratories is hold, with an average price target of $37.50.
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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 owns shares of Dolby Laboratories. Motley Fool newsletter services recommend Dolby Laboratories. 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.