Rosetta Stone Beats on the Top Line

Before you go, we thought you'd like these...
Before you go close icon

Rosetta Stone (NYS: RST) reported earnings on Nov. 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Rosetta Stone beat expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue was unchanged and GAAP loss per share grew.


Gross margins grew, operating margins grew, net margins shrank.

Revenue details
Rosetta Stone logged revenue of $64.3 million. The five analysts polled by S&P Capital IQ looked for sales of $61.0 million on the same basis. GAAP reported sales were 0.1% higher than the prior-year quarter's $64.2 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at -$0.08. The two earnings estimates compiled by S&P Capital IQ averaged -$0.05 per share. GAAP EPS were -$1.58 for Q3 versus -$0.06 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 82.6%, 20 basis points better than the prior-year quarter. Operating margin was -5.7%, 370 basis points better than the prior-year quarter. Net margin was -51.9%, 5,010 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $79.1 million. On the bottom line, the average EPS estimate is $0.06.

Next year's average estimate for revenue is $270.3 million. The average EPS estimate is -$0.18.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 678 members out of 767 rating the stock outperform, and 89 members rating it underperform. Among 155 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 136 give Rosetta Stone a green thumbs-up, and 19 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Rosetta Stone is hold, with an average price target of $12.67.

Software and computerized services are being consumed in radically different ways, on new and increasingly mobile devices. Many old leaders will be left behind. Whether or not Rosetta Stone makes the coming cut, you should check out the company that Motley Fool analysts expect to lead the pack in "The Next Trillion-dollar Revolution." Click here for instant access to this free report.

The article Rosetta Stone Beats on the Top Line originally appeared on Fool.com.

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 ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Rosetta Stone. Motley Fool newsletter services recommend Rosetta Stone. 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.

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

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners