These results back up our theme that many stocks have been unfairly punished since July highs. RVBD in escense has a double top in July around $42 and the stock traded just north of $22 today. How does a stock drop 50% when earnings actually grew faster than expected?
RVBD reported record margins, operating profit, and net income. It earned $.24 versus the reduced estimates of $.21. Revenue came in at $191M versus $185M estimate.
Guidance for Q4 was $.24 to $.25 at revenue levels around $200M. Solid numbers generally above estimates that likely will be exceeded easily. Wouldn't expect anything less than $.26.
Worth noting is that it bought back $20M worth of shares and generated $90M of operating cash flows. Not a bad use of cash considering the weak stock prices in Q3.
Q3’11 Financial Highlights
- Total non-GAAP revenue grew 29% year-over-year to $191 million
- Product revenue grew 28% year-over-year to $132 million
- Non-GAAP service revenue grew 30% year-over-year to $59 million
- Record non-GAAP gross margin of 79.0%, compared to 78.0% in Q3’10
- Record non-GAAP operating profit of $57 million, increased 38% year-over-year
- Record non-GAAP operating margin of 30.1%, compared to 28.1% in Q3’10
- Record non-GAAP net income of $40 million, increased 51% year-over-year
- Deferred revenue grew 37% year-over-year to $148 million
- Non-GAAP net income for Q3’11 was $40 million, or $0.24 per diluted share, as compared to non-GAAP net income for Q3’10 of $27 million, or $0.17 per diluted share.
- exited the period with $559 million in cash and investments after repurchasing $20 million of Riverbed shares and paying out $120 million for acquisitions
Disclosure: Long RVBD. Please review the disclaimer page for more details.