LeapFrog Enterprises Outruns Estimates Again

Seth Jayson, The Motley Fool
Updated

LeapFrog Enterprises (NYS: LF) reported earnings on May 3. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), LeapFrog Enterprises crushed expectations on revenues and exceeded expectations on earnings per share.

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


Margins increased across the board.

Revenue details
LeapFrog Enterprises chalked up revenue of $72.0 million. The six analysts polled by S&P Capital IQ predicted revenue of $51.1 million on the same basis. GAAP reported sales were 81% higher than the prior-year quarter's $39.7 million.

anImage
anImage

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

EPS details
EPS came in at -$0.14. The three earnings estimates compiled by S&P Capital IQ forecast -$0.26 per share. GAAP EPS were -$0.14 for Q1 versus -$0.34 per share for the prior-year quarter.

anImage
anImage

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 41.3%, 1,170 basis points better than the prior-year quarter. Operating margin was -11.9%, 4,320 basis points better than the prior-year quarter. Net margin was -13.1%, 4,280 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $66.5 million. On the bottom line, the average EPS estimate is -$0.18.

Next year's average estimate for revenue is $507.0 million. The average EPS estimate is $0.50.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 221 members out of 273 rating the stock outperform, and 52 members rating it underperform. Among 64 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 49 give LeapFrog Enterprises a green thumbs-up, and 15 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on LeapFrog Enterprises is outperform, with an average price target of $8.50.

Over the decades, small-cap stocks like LeapFrog Enterprises have produced market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: 2 Small Caps the Government Won't Let Go Broke." 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. Motley Fool newsletter services have recommended buying shares of LeapFrog Enterprises. 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