The 10-second takeaway
For the quarter ended June 28 (Q3), Dolby Laboratories met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue was unchanged. Non-GAAP earnings per share shrank significantly. GAAP earnings per share shrank significantly.
Margins contracted across the board.
Dolby Laboratories logged revenue of $207.1 million. The six analysts polled by S&P Capital IQ predicted sales of $208.3 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 $0.47. The six earnings estimates compiled by S&P Capital IQ averaged $0.41 per share. Non-GAAP EPS of $0.47 for Q3 were 18% lower than the prior-year quarter's $0.57 per share. GAAP EPS of $0.29 for Q3 were 40% lower than the prior-year quarter's $0.48 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 88.2%, 170 basis points worse than the prior-year quarter. Operating margin was 20.7%, much worse than the prior-year quarter. Net margin was 14.6%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $218.4 million. On the bottom line, the average EPS estimate is $0.50.
Next year's average estimate for revenue is $910.6 million. The average EPS estimate is $2.24.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 3,809 members out of 3,910 rating the stock outperform, and 101 members rating it underperform. Among 1,103 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,083 give Dolby Laboratories a green thumbs-up, and 20 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Dolby Laboratories is hold, with an average price target of $33.20.
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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 Dolby Laboratories. 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.