The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Digital Generation missed estimates on revenues and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank. GAAP earnings per share dropped to a loss.
Margins contracted across the board.
Digital Generation booked revenue of $103.6 million. The five analysts polled by S&P Capital IQ foresaw revenue of $107.0 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.
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 -$0.75. The five earnings estimates compiled by S&P Capital IQ anticipated $0.21 per share. GAAP EPS were -$0.75 for Q4 compared to $0.16 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 67.3%, 320 basis points worse than the prior-year quarter. Operating margin was 17.9%, 540 basis points worse than the prior-year quarter. Net margin was -20.1%, 2,420 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $94.4 million. On the bottom line, the average EPS estimate is $0.05.
Next year's average estimate for revenue is $403.0 million. The average EPS estimate is $0.56.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 239 members out of 254 rating the stock outperform, and 15 members rating it underperform. Among 47 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 44 give Digital Generation a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Digital Generation is outperform, with an average price target of $14.80.
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