DragonWave Whiffs on Revenues

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DragonWave (NAS: DRWI) reported earnings on Jan. 11. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Nov. 30 (Q3), DragonWave whiffed on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted significantly, and earnings per share dropped.

Margins dropped across the board.

Revenue details
DragonWave chalked up revenue of $12 million. The 10 analysts polled by S&P Capital IQ expected to see a top line of $14 million. Sales were 56% lower than the prior-year quarter's $26 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
EPS came in at -$0.23. The six earnings estimates compiled by S&P Capital IQ predicted -$0.21 per share. GAAP EPS were -$0.23 for Q3 versus $0.00 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 40.9%, 710 basis points worse than the prior-year quarter. Operating margin was -80.0%, 8,030 basis points worse than the prior-year quarter. Net margin was -67.8%, 6,760 basis points worse than the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods.

Looking ahead
What does the future hold?

Next quarter's average estimate for revenue is $18 million. On the bottom line, the average EPS estimate is -$0.18.

Next year's average estimate for revenue is $58 million. The average EPS estimate is -$0.80.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 266 members out of 278 rating the stock outperform, and 12 members rating it underperform. Among 44 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 42 give DragonWave a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on DragonWave is hold, with an average price target of $6.07.

At the time this article was published

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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