The Gory Details of MIPS Technologies' Earnings Miss

MIPS Technologies (NAS: MIPS) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q2), MIPS Technologies missed on revenues and whiffed on earnings per share.

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

Margins dropped across the board.

Revenue details
MIPS Technologies recorded revenue of $15.3 million. The five analysts polled by S&P Capital IQ hoped for a top line of $16.2 million. Sales were 30% lower than the prior-year quarter's $21.9 million.


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

EPS details
Non-GAAP EPS came in at $0.01. The five earnings estimates compiled by S&P Capital IQ predicted $0.03 per share on the same basis. GAAP EPS were -$0.02 for Q2 compared to $0.11 per share for the prior-year quarter.


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 97.8%, 80 basis points worse than the prior-year quarter. Operating margin was -3.6%, 3,010 basis points worse than the prior-year quarter. Net margin was -6.4%, 3,410 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $16.3 million. On the bottom line, the average EPS estimate is $0.03.

Next year's average estimate for revenue is $66.1 million. The average EPS estimate is $0.15.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 302 members out of 326 rating the stock outperform, and 24 members rating it underperform. Among 74 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 69 give MIPS Technologies a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on MIPS Technologies is outperform, with an average price target of $6.50.

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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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