The 10-second takeaway
For the quarter ended Jan. 31 (Q3), Mitel Networks met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank. Non-GAAP earnings per share grew. GAAP earnings per share shrank significantly.
Gross margins grew, operating margins expanded, net margins dropped.
Mitel Networks chalked up revenue of $142.0 million. The three analysts polled by S&P Capital IQ wanted to see revenue of $142.0 million on the same basis. GAAP reported sales were 5.6% lower than the prior-year quarter's $150.5 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 $0.23. The five earnings estimates compiled by S&P Capital IQ averaged $0.22 per share. Non-GAAP EPS of $0.23 for Q3 were 9.5% higher than the prior-year quarter's $0.21 per share. GAAP EPS of $0.04 for Q3 were 50% lower than the prior-year quarter's $0.08 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 55.5%, 110 basis points better than the prior-year quarter. Operating margin was 8.6%, 90 basis points better than the prior-year quarter. Net margin was 1.5%, 160 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $145.4 million. On the bottom line, the average EPS estimate is $0.25.
Next year's average estimate for revenue is $571.4 million. The average EPS estimate is $0.73.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 15 members out of 19 rating the stock outperform, and four members rating it underperform. Among five CAPS All-Star picks (recommendations by the highest-ranked CAPS members), four give Mitel Networks a green thumbs-up, and one give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Mitel Networks is outperform, with an average price target of $4.80.
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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 has no position in any of the stocks mentioned. 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.