The 10-second takeaway
For the quarter ended June 30 (Q4), Extreme Networks beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank. Non-GAAP earnings per share dropped. GAAP earnings per share shrank significantly.
Margins shrank across the board.
Extreme Networks tallied revenue of $79.5 million. The two analysts polled by S&P Capital IQ wanted to see revenue of $74.6 million on the same basis. GAAP reported sales were 9.3% lower than the prior-year quarter's $87.6 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
EPS came in at $0.07. The two earnings estimates compiled by S&P Capital IQ forecast $0.06 per share. Non-GAAP EPS of $0.07 for Q4 were 13% lower than the prior-year quarter's $0.08 per share. GAAP EPS of $0.03 for Q4 were 63% lower than the prior-year quarter's $0.08 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
For the quarter, gross margin was 55.3%, 40 basis points worse than the prior-year quarter. Operating margin was 4.4%, 190 basis points worse than the prior-year quarter. Net margin was 4.0%, 490 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $70.6 million. On the bottom line, the average EPS estimate is $0.05.
Next year's average estimate for revenue is $301.8 million. The average EPS estimate is $0.27.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 116 members out of 124 rating the stock outperform, and eight members rating it underperform. Among 24 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 23 give Extreme Networks a green thumbs-up, and one give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Extreme Networks is outperform, with an average price target of $5.25.
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