Quest Software's Latest EPS Tops Last Year's by 28%

Seth Jayson, The Motley Fool
Updated

Quest Software (NAS: QSFT) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Quest Software met expectations on revenue and missed expectations on earnings per share.

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

Gross margin dropped, operating margin grew, and net margin dropped.

Revenue details
Quest Software logged revenue of $245.9 million. The eight analysts polled by S&P Capital IQ predicted a top line of $243.6 million on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $216.8 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.51. The nine earnings estimates compiled by S&P Capital IQ averaged $0.52 per share on the same basis. GAAP EPS of $0.15 for Q4 were 63% lower than the prior-year quarter's $0.40 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 89.3%, 20 basis points worse than the prior-year quarter. Operating margin was 18.3%, 390 basis points better than the prior-year quarter. Net margin was 5.1%, 1,200 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $210.9 million. On the bottom line, the average EPS estimate is $0.32.

Next year's average estimate for revenue is $927.4 million. The average EPS estimate is $1.69.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 99 members out of 106 rating the stock outperform, and seven members rating it underperform. Among 36 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 35 give Quest Software a green thumbs-up, and one gives it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Quest Software is hold, with an average price target of $22.64.

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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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