Xyratex Crushes Estimates
Xyratex (NAS: XRTX) reported earnings on Jan. 5. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended Nov. 30 (Q4), Xyratex beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank slightly, and earnings per share dropped significantly.
Gross margins grew, operating margins expanded, and net margins dropped.
Xyratex reported revenue of $388 million. The five analysts polled by S&P Capital IQ predicted revenue of $362 million. Sales were 2.3% lower than the prior-year quarter's $397 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.73. The five earnings estimates compiled by S&P Capital IQ averaged $0.34 per share on the same basis. GAAP EPS of $0.65 for Q4 were 36% lower than the prior-year quarter's $1.02 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 17.7%, 160 basis points better than the prior-year quarter. Operating margin was 6.7%, 240 basis points better than the prior-year quarter. Net margin was 4.8%, 330 basis points worse than the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods.
What does the future hold?
Next quarter's average estimate for revenue is $317 million. On the bottom line, the average EPS estimate is $0.27.
Next year's average estimate for revenue is $1.4 billion. The average EPS estimate is $1.78.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 265 members out of 285 rating the stock outperform, and 20 members rating it underperform. Among 76 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 70 give Xyratex a green thumbs-up, and six give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Xyratex is outperform, with an average price target of $12.40.
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At the time this article was published 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. 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.
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