The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Volcano met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share increased. GAAP earnings per share dropped significantly.
Margins contracted across the board.
Volcano tallied revenue of $102.5 million. The 15 analysts polled by S&P Capital IQ hoped for revenue of $102.6 million on the same basis. GAAP reported sales were 10% higher than the prior-year quarter's $92.7 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 $0.15. The 15 earnings estimates compiled by S&P Capital IQ averaged $0.09 per share. Non-GAAP EPS of $0.15 for Q4 were 7.1% higher than the prior-year quarter's $0.14 per share. GAAP EPS of $0.04 for Q4 were 93% lower than the prior-year quarter's $0.54 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 66.7%, 60 basis points worse than the prior-year quarter. Operating margin was 6.8%, 260 basis points worse than the prior-year quarter. Net margin was 2.4%, much worse than the prior-year quarter.
Next quarter's average estimate for revenue is $99.1 million. On the bottom line, the average EPS estimate is $0.02.
Next year's average estimate for revenue is $424.8 million. The average EPS estimate is $0.28.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 160 members out of 186 rating the stock outperform, and 26 members rating it underperform. Among 52 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 44 give Volcano a green thumbs-up, and eight give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Volcano is outperform, with an average price target of $29.95.
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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 Volcano. 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.