DTS Beats Estimates But Has a Big Earnings Drop

DTS (Nasdaq: DTSI  ) reported earnings on March 11. Here are the numbers you need to know.

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

Compared to the prior-year quarter, revenue expanded slightly. Non-GAAP earnings per share dropped significantly. GAAP earnings per share dropped significantly.

Margins dropped across the board.

Revenue details
DTS reported revenue of $29.8 million. The eight analysts polled by S&P Capital IQ anticipated revenue of $31.2 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

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 $0.33. The eight earnings estimates compiled by S&P Capital IQ forecast $0.15 per share. Non-GAAP EPS of $0.33 for Q4 were 37% lower than the prior-year quarter's $0.52 per share. GAAP EPS of $0.02 for Q4 were 95% lower than the prior-year quarter's $0.42 per share.

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 93.8%, 550 basis points worse than the prior-year quarter. Operating margin was -6.8%, much worse than the prior-year quarter. Net margin was 1.0%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $34.9 million. On the bottom line, the average EPS estimate is $0.28.

Next year's average estimate for revenue is $146.3 million. The average EPS estimate is $1.10.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 50 members out of 70 rating the stock outperform, and 20 members rating it underperform. Among 23 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 17 give DTS a green thumbs-up, and six give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on DTS is hold, with an average price target of $17.88.

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