Oclaro Beats Expectations but Takes a Step Back Anyway

Oclaro (NAS: OCLR) reported earnings on Jan. 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Oclaro beat expectations on revenues and beat expectations on earnings per share.

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

Margins dropped across the board.

Revenue details
Oclaro booked revenue of $86.5 million. The one analyst polled by S&P Capital IQ expected net sales of $81.1 million. Sales were 28% lower than the prior-year quarter's $120.3 million.


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

EPS details
Non-GAAP EPS came in at -$0.35. The seven earnings estimates compiled by S&P Capital IQ forecast -$0.38 per share on the same basis. GAAP EPS were -$0.21 for Q2 compared to $0.00 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 12.6%, 1,710 basis points worse than the prior-year quarter. Operating margin was -24.6%, 2,810 basis points worse than the prior-year quarter. Net margin was -36.0%, 3,580 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $95.2 million. On the bottom line, the average EPS estimate is -$0.27.

Next year's average estimate for revenue is $400.7 million. The average EPS estimate is -$0.93.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 122 members out of 158 rating the stock outperform, and 36 members rating it underperform. Among 31 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 27 give Oclaro a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Oclaro is hold, with an average price target of $6.36.

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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 don't 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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