The 10-second takeaway
For the quarter ended March 31 (Q1), Digital Generation met expectations on revenues and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank slightly. GAAP earnings per share shrank to a loss.
Margins shrank across the board.
Digital Generation chalked up revenue of $92.0 million. The two analysts polled by S&P Capital IQ foresaw revenue of $91.5 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.
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 -$0.04. The two earnings estimates compiled by S&P Capital IQ forecast -$0.05 per share. GAAP EPS were -$0.04 for Q1 against $0.04 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 64.1%, 40 basis points worse than the prior-year quarter. Operating margin was 11.1%, 170 basis points worse than the prior-year quarter. Net margin was -1.2%, 230 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $95.1 million. On the bottom line, the average EPS estimate is $0.03.
Next year's average estimate for revenue is $387.1 million. The average EPS estimate is $0.22.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 238 members out of 252 rating the stock outperform, and 14 members rating it underperform. Among 43 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 40 give Digital Generation 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 Digital Generation is hold, with an average price target of $12.00.
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