The 10-second takeaway
For the quarter ended March 31 (Q1), ReachLocal met expectations on revenues and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly. GAAP loss per share contracted.
Gross margins shrank, operating margins grew, net margins increased.
ReachLocal booked revenue of $121.8 million. The eight analysts polled by S&P Capital IQ expected a top line of $122.7 million on the same basis. GAAP reported sales were 17% higher than the prior-year quarter's $104.0 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 -$0.02. The eight earnings estimates compiled by S&P Capital IQ predicted -$0.01 per share. GAAP EPS were -$0.02 for Q1 compared to -$0.03 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 49.5%, 10 basis points worse than the prior-year quarter. Operating margin was 0.1%, 110 basis points better than the prior-year quarter. Net margin was -0.5%, 50 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $124.9 million. On the bottom line, the average EPS estimate is -$0.08.
Next year's average estimate for revenue is $532.4 million. The average EPS estimate is -$0.08.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 68 members out of 74 rating the stock outperform, and six members rating it underperform. Among 24 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 21 give ReachLocal a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on ReachLocal is outperform, with an average price target of $17.00.
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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 ReachLocal. 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.