Skullcandy (NASDAQ:SKUL) reported its second-quarter results after market close on August 6. The company's results were mixed, with earnings coming out ahead of analyst estimates, but revenue falling slightly short of expectations. Skullcandy reported quarterly revenue of $58 million, up 8% year over year, but just shy of the average analyst estimate of $58.55 million. EPS of $0.04, while down 24% year over year, was $0.01 better than analysts expected. Here's what investors need to know about Skullcandy's results.

Currency issues and raised guidance
Changes in foreign exchange rates had a significant impact on Skullcandy's results. While U.S. sales represented about 71% of the company's sales during the second quarter, International sales grew far faster, even including currency effects.

U.S. sales rose 5% year over year during the quarter, while International sales jumped 16%, or 24% adjusted for currency. Overall, Skullcandy grew revenue by 10% on a constant-currency basis.

The effect that currency had on the company's profitability was even more pronounced. While net income per share slumped 24% year over year, it grew by 17% adjusted for currency. Gross margin fell to 42.8%, down from 45% during the second quarter of 2014, due to both currency effects, as well as a mix shift toward lower-margin gaming products. SG&A expenses rose slower than revenue on both a reported and constant-currency basis, growing by 4% and 7% respectively.

CEO Hoby Darling pointed to Skullcandy's leading position in the headphone market, as well as the rapid growth of Astro, the company's gaming-focused brand:

Everything we do at Skullcandy and Astro puts the consumer at the center. We strive to inspire people to live life at full volume through our innovations, products, and brand storytelling. Through this dedication to our consumer, Skullcandy once again was the number one headphone choice in units for the second quarter and year to date. Astro also outpaced its competition in the gaming market growing nearly three times faster than the industry during Q2.

Through the first six months of 2015, Skullcandy's operating cash flow was a loss of $11.8 million, down significantly from a gain of $7.1 million during the same period last year. However, the company explained in its earnings release that it began a program of accelerated payments with certain contract manufacturers, leading to a decline in both its accounts payable and accrued liabilities balances. This created a drag on cash flow during the first half of this year, but the company expects to realize both product cost discounts and gross margin benefits as a result of these efforts. In this case, the decline in operating cash flow appears to be nothing to worry about.

While Skullcandy's results were mixed, the company raised its earnings guidance for the full year. The company now expects EPS between $0.41 and $0.43, up from a previous range of $0.36-$0.40. Guidance for full year revenue remains unchanged, with Skullcandy expecting 13%-15% growth compared to 2014.

Skullcandy's guidance for the third quarter also remained unchanged. Revenue is expected to grow by 17%-19% year over year, and EPS is expected to be between $0.07 and $0.08.

Skullcandy had a decent quarter, but currency effects dragged down both revenue and earnings. It appears that the company is expecting this issue to subside going forward, as its guidance calls for much faster revenue growth during the third quarter and the full year.

During the third quarter of 2014, the company reported EPS of $0.07, so flat earnings is the worst-case scenario if Skullcandy hits its guidance. While it wasn't a blowout quarter for Skullcandy, improved guidance is certainly good news for investors.