Yahoo Finance Dolby's (DLB) Q2 Earnings and Revenues Surpass Estimates
Dolby Laboratories, Inc DLB reported second-quarter fiscal 2024 results, with non-GAAP earnings per share (EPS) of $1.27 compared with $1.26 reported in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate of $1.17.
Total revenues were $364.5 million, lower than $375.9 million in the year-ago quarter. However, the top line surpassed the Zacks Consensus Estimate by 0.7%.
Management reiterated its guidance for fiscal 2024. The company expects revenues to be $1.30 billion. GAAP EPS is projected to be between $2.30 and $2.45. Non-GAAP EPS is suggested in the range of $3.60-$3.75.
The Zacks Consensus Estimate for fiscal 2024 non-GAAP EPS and revenues is pegged at $3.64 and $1.3 billion, respectively.
Dolby’s performance is gaining from increasing adoption of Dolby Atmos and Dolby Vision. The company expects revenues from these businesses along with imaging patents to grow by high-single digit in fiscal 2024. Management continues to forecast multi-year CAGR of 15-25% in these businesses over the medium term.
Dolby Laboratories Price, Consensus and EPS Surprise
Dolby Laboratories price-consensus-eps-surprise-chart | Dolby Laboratories Quote
DLB also expects mid-single-digit decline in foundational audio licensing revenues in fiscal 2024.
Segmental Performance
Revenues from Licensing were $338.2 million, down from $351.6 million in the prior-year quarter. Products and Services’ revenues were $26.3 million compared with $24.3 million in the year-ago quarter.
We expected revenues from Licensing, and Products and Services to be $336.9 million and $27.9 million, respectively.
Broadcast Licensing contributed 31% to total licensing revenues in the quarter under review. Mobile Licensing, Consumer Electronics, PC Licensing and Licensing from Other Markets accounted for 26%, 12%, 15% and 16% of licensing revenues, respectively.
Other Details
Gross profit was $325.8 million compared with $334.8 million in the year-ago quarter. Total operating expenses decreased to $216.8 million from $225.6 million in the prior-year quarter.
Operating income was $109 million compared with $109.2 million in the year-earlier quarter.
Cash Flow and Liquidity
For the six months ended Mar 29, 2024, Dolby generated $189.8 million of net cash from operating activities compared with $160.9 million in the prior year.
As of Mar 29, 2024, the company had $709.5 million in cash and cash equivalents, with $607 million in total liabilities. In comparison, it had $656.8 million in cash and cash equivalents, with $573.2 million in total liabilities, as of Dec 29, 2023.
Dolby repurchased 294,000 shares worth $25 million in the quarter under review and has $107 million of stock repurchase authorization available going forward.
Management announced a dividend of 30 cents per share, payable on May 22, 2024, to shareholders of record as of May 14, 2024.
Guidance
For the third quarter of fiscal 2024, DLB expects GAAP EPS in the band of 21-36 cents. Non-GAAP EPS is forecast to be between 51 cents and -66 cents on revenues of $270-$300 million.
The Zacks Consensus Estimate for fiscal third quarter non-GAAP EPS and revenues is pegged at 77 cents and $312.1 million, respectively.
For the third quarter, Licensing revenue is expected to between $245 million and $275 million.
On a GAAP basis, operating expenses are estimated in the range of $215-$225 million, whereas, on a non-GAAP basis, the metric is anticipated to be between $180 million and $190 million.
For fiscal 2024, DLB projects GAAP operating margin to be 20%, while non-GAAP operating margin is estimated to be nearly 32%.
On a GAAP basis, operating expenses are anticipated to be between $885 million and $895 million, whereas, on a non-GAAP basis, the metric is suggested in the range of $740-$750 million.
Zacks Rank
Dolby currently has a Zacks Rank #4 (Sell).
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Badger Meter BMI, Salesforce CRM and The Descartes Systems Group Inc DSGX. While BMI sports a Zacks Rank #1 (Strong Buy), CRM and DSGX carry a Zacks Rank of 2 (Buy) each, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Badger Meter’s 2024 EPS is pegged at $3.89, up 9.9% in the past 60 days. The long-term earnings growth rate is 15.6%.
BMI’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 12.7%. Shares of BMI have soared 37.9% in the past year.
The Zacks Consensus Estimate for CRM’s fiscal 2025 EPS is pegged at $9.71. Salesforce’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 5.1%.
The long-term earnings growth rate for CRM is 17.4%. Shares of CRM have gained 41.3% in the past year.
The Zacks Consensus Estimate for DSGX’s fiscal 2025 EPS has increased 3% in the past 60 days to $1.69. Descartes earnings beat the Zacks Consensus Estimate in two of the last four quarters, while missing in the remaining two quarters, the average surprise being 5.1%. Shares of DSGX have gained 27.5% in the past year.
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