The 10-second takeaway
For the quarter ended June 30 (Q2), Entropic Communications met expectations on revenues and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted. Non-GAAP earnings per share contracted significantly. GAAP earnings per share.
Margins contracted across the board.
Entropic Communications notched revenue of $70.6 million. The nine analysts polled by S&P Capital IQ predicted a top line of $70.1 million on the same basis. GAAP reported sales were 15% lower than the prior-year quarter's $83.1 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 $0.01. The 10 earnings estimates compiled by S&P Capital IQ predicted $0.00 per share. Non-GAAP EPS of $0.01 for Q2 were 89% lower than the prior-year quarter's $0.09 per share. GAAP EPS were -$0.44 for Q2 versus $0.00 per share for the prior-year quarter.
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 48.5%, 310 basis points worse than the prior-year quarter. Operating margin was -8.6%, much worse than the prior-year quarter. Net margin was -56.5%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $74.0 million. On the bottom line, the average EPS estimate is $0.01.
Next year's average estimate for revenue is $298.0 million. The average EPS estimate is $0.05.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 243 members out of 273 rating the stock outperform, and 30 members rating it underperform. Among 59 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 50 give Entropic Communications 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 Entropic Communications is hold, with an average price target of $5.39.
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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. The Motley Fool has no position in any of the stocks mentioned. 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.