Avid Technology Beats Estimates on Top and Bottom Lines

Seth Jayson, The Motley Fool
Updated

Avid Technology (NAS: AVID) reported earnings on Feb. 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Avid Technology beat expectations on revenues and earnings per share.

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

Gross margins grew, operating margins dropped, and net margins increased.

Revenue details
Avid Technology booked revenue of $185.3 million. The four analysts polled by S&P Capital IQ predicted a top line of $176.3 million. Sales were 5.1% lower than the prior-year quarter's $195.3 million.

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

EPS details
Non-GAAP EPS came in at $0.38. The four earnings estimates compiled by S&P Capital IQ predicted $0.15 per share on the same basis. GAAP EPS were $0.03 for Q4 versus -$0.01 per share for the prior-year quarter.

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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 54.5%, 40 basis points better than the prior-year quarter. Operating margin was 4.1%, 50 basis points worse than the prior-year quarter. Net margin was 0.7%, 100 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $169.7 million. On the bottom line, the average EPS estimate is $0.03.

Next year's average estimate for revenue is $689.2 million. The average EPS estimate is $0.38.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 84 members out of 122 rating the stock outperform, and 38 members rating it underperform. Among 35 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 24 give Avid Technology a green thumbs-up, and 11 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Avid Technology is hold, with an average price target of $9.88.

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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.

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