The 10-second takeaway
For the quarter ended Dec. 28 (Q1), Dolby Laboratories beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded slightly and GAAP earnings per share dropped significantly.
Margins dropped across the board.
Dolby Laboratories tallied revenue of $236.6 million. The nine analysts polled by S&P Capital IQ expected to see a top line of $221.6 million on the same basis. GAAP reported sales were 1.4% higher than the prior-year quarter's $233.4 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 $0.64. The six earnings estimates compiled by S&P Capital IQ forecast $0.56 per share. GAAP EPS of $0.50 for Q1 were 25% lower than the prior-year quarter's $0.67 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 89.2%, 210 basis points worse than the prior-year quarter. Operating margin was 28.3%, 1,530 basis points worse than the prior-year quarter. Net margin was 21.7%, 960 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $249.0 million. On the bottom line, the average EPS estimate is $0.73.
Next year's average estimate for revenue is $920.9 million. The average EPS estimate is $2.29.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 3,930 members out of 4,032 rating the stock outperform, and 102 members rating it underperform. Among 1,152 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,131 give Dolby Laboratories a green thumbs-up, and 21 give it a red thumbs-down.
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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 recommends 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.