The 10-second takeaway
For the quarter ended Sep. 30 (Q3), EZchip Semiconductor beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank significantly and GAAP earnings per share dropped to zero.
Gross margins increased, operating margins dropped, net margins contracted.
EZchip Semiconductor tallied revenue of $9.3 million. The 11 analysts polled by S&P Capital IQ predicted sales of $9.1 million on the same basis. GAAP reported sales were 50% lower than the prior-year quarter's $18.7 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 $0.10. The 10 earnings estimates compiled by S&P Capital IQ anticipated $0.09 per share. GAAP EPS dropped to zero from the prior-year quarter's $0.27.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 83.9%, 800 basis points better than the prior-year quarter. Operating margin was -4.7%, 4,310 basis points worse than the prior-year quarter. Net margin was 1.4%, 3,950 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $11.8 million. On the bottom line, the average EPS estimate is $0.15.
Next year's average estimate for revenue is $50.7 million. The average EPS estimate is $0.80.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 241 members out of 255 rating the stock outperform, and 14 members rating it underperform. Among 42 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 40 give EZchip Semiconductor 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 EZchip Semiconductor is outperform, with an average price target of $37.88.
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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 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.
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