The 10-second takeaway
For the quarter ended March 31 (Q1), Mellanox Technologies beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted. Non-GAAP earnings per share dropped significantly. GAAP earnings per share dropped to a loss.
Margins dropped across the board.
Mellanox Technologies reported revenue of $83.1 million. The 15 analysts polled by S&P Capital IQ expected to see revenue of $80.9 million on the same basis. GAAP reported sales were 6.4% lower than the prior-year quarter's $88.7 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 $0.10. The 14 earnings estimates compiled by S&P Capital IQ predicted $0.04 per share. Non-GAAP EPS of $0.10 for Q1 were 80% lower than the prior-year quarter's $0.51 per share. GAAP EPS were -$0.20 for Q1 compared to $0.29 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 65.2%, 220 basis points worse than the prior-year quarter. Operating margin was -9.5%, much worse than the prior-year quarter. Net margin was -10.2%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $106.8 million. On the bottom line, the average EPS estimate is $0.42.
Next year's average estimate for revenue is $450.2 million. The average EPS estimate is $1.81.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 190 members out of 216 rating the stock outperform, and 26 members rating it underperform. Among 53 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 44 give Mellanox Technologies a green thumbs-up, and nine give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Mellanox Technologies is outperform, with an average price target of $58.00.
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