The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Cavium met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly. Non-GAAP earnings per share expanded significantly. GAAP loss per share increased.
Gross margins grew, operating margins grew, net margins dropped.
Cavium reported revenue of $66.4 million. The 22 analysts polled by S&P Capital IQ predicted revenue of $66.1 million on the same basis. GAAP reported sales were 18% higher than the prior-year quarter's $56.3 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 $0.20. The 22 earnings estimates compiled by S&P Capital IQ predicted $0.17 per share. Non-GAAP EPS of $0.20 for Q4 were 18% higher than the prior-year quarter's $0.17 per share. GAAP EPS were -$1.56 for Q4 against -$0.20 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 62.3%, 420 basis points better than the prior-year quarter. Operating margin was -13.9%, 290 basis points better than the prior-year quarter. Net margin was -118.8%, much worse than the prior-year quarter.
Next quarter's average estimate for revenue is $69.3 million. On the bottom line, the average EPS estimate is $0.18.
Next year's average estimate for revenue is $309.9 million. The average EPS estimate is $1.00.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 81 members out of 115 rating the stock outperform, and 34 members rating it underperform. Among 43 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 35 give Cavium 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 Cavium is outperform, with an average price target of $34.28.
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