The 10-second takeaway
For the quarter ended Dec. 31 (Q4), LeapFrog Enterprises beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share expanded significantly.
Gross margins were steady, operating margins increased, net margins grew.
LeapFrog Enterprises logged revenue of $244.7 million. The seven analysts polled by S&P Capital IQ predicted revenue of $225.0 million on the same basis. GAAP reported sales were 16% higher than the prior-year quarter's $210.2 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 $0.89. The six earnings estimates compiled by S&P Capital IQ forecast $0.49 per share. GAAP EPS of $0.89 for Q4 were 82% higher than the prior-year quarter's $0.49 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 44.7%, about the same as the prior-year quarter. Operating margin was 17.7%, 150 basis points better than the prior-year quarter. Net margin was 25.4%, 980 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $75.5 million. On the bottom line, the average EPS estimate is -$0.11.
Next year's average estimate for revenue is $580.2 million. The average EPS estimate is $0.87.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 355 members out of 405 rating the stock outperform, and 50 members rating it underperform. Among 101 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 87 give LeapFrog Enterprises a green thumbs-up, and 14 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on LeapFrog Enterprises is outperform, with an average price target of $14.75.
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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 LeapFrog Enterprises. The Motley Fool owns shares of LeapFrog Enterprises. 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.