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.
Is Cavium the best semiconductor stock for you? You may be missing something obvious. Check out the semiconductor company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.
- Add Cavium to My Watchlist.
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.