8x8 Crushes Estimates

Seth Jayson, The Motley Fool
Updated

8x8 (NAS: EGHT) reported earnings on Jan. 18. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q3), 8x8 beat expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue improved significantly, and earnings per share expanded significantly.

Gross margins shrank, operating margins dropped, net margins increased.

Revenue details
8x8 reported revenue of $23 million. The three analysts polled by S&P Capital IQ wanted to see sales of $22 million. Sales were 31% higher than the prior-year quarter's $18 million

anImage
anImage

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

EPS details
EPS came in at $0.04. The one earnings estimate compiled by S&P Capital IQ anticipated $0.03 per share. GAAP EPS of $0.04 for Q3 were 100% higher than the prior-year quarter's $0.02 per share.

anImage
anImage

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 67.9%, 30 basis points worse than the prior-year quarter. Operating margin was 11.0%, 50 basis points worse than the prior-year quarter. Net margin was 11.1%, 270 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $23 million. On the bottom line, the average EPS estimate is $0.04.

Next year's average estimate for revenue is $82 million. The average EPS estimate is $0.12.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 266 members out of 275 rating the stock outperform, and 10 members rating it underperform. Among 39 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 36 give 8x8 a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on 8x8 is buy, with an average price target of $5.58.

New mobile devices and services are changing the game and potential profitability in the wireless industry. Some will fail, some will tread water, and those providing the right services and the right devices will shine. Who will lead going forward? Check out "3 Hidden Winners of the iPhone, iPad, and Android Revolution." Click here for instant access to this free report.

At the time thisarticle 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.

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

Advertisement