SolarWinds Beats on Both Top and Bottom Lines

Just the facts, Fool.

Seth Jayson
Seth Jayson
Feb 4, 2013 at 12:00AM
Other

SolarWinds (NYSE: SWI) reported earnings on Feb. 4. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), SolarWinds beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share grew significantly.

Gross margins shrank, operating margins contracted, net margins grew.

Revenue details
SolarWinds recorded revenue of $73.5 million. The 15 analysts polled by S&P Capital IQ hoped for sales of $70.7 million on the same basis. GAAP reported sales were 32% higher than the prior-year quarter's $55.6 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.36. The 16 earnings estimates compiled by S&P Capital IQ anticipated $0.33 per share. GAAP EPS of $0.29 for Q4 were 32% higher than the prior-year quarter's $0.22 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 92.8%, 110 basis points worse than the prior-year quarter. Operating margin was 42.3%, 60 basis points worse than the prior-year quarter. Net margin was 30.3%, 100 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $74.7 million. On the bottom line, the average EPS estimate is $0.35.

Next year's average estimate for revenue is $332.4 million. The average EPS estimate is $1.54.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 131 members out of 165 rating the stock outperform, and 34 members rating it underperform. Among 44 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 33 give SolarWinds a green thumbs-up, and 11 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on SolarWinds is outperform, with an average price target of $56.36.

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