Acme Packet Inc. Earnings: Margins Shrink as Net Income Drops

Acme Packet, Inc. (NASDAQ:APKT) reported a lower net income in first quarter, missing analysts’ estimates. Acme Packet provides session border controllers that enable service providers to deliver secure interactive communications–voice, video, and other real-time multimedia sessions–across Internet Protocol network borders.

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Acme Packet Earnings Cheat Sheet for the First Quarter

Results: Net income for Acme Packet, Inc. fell to $2.4 million (3 cents per share) vs. $13.7 million (19 cents per share) a year earlier. This is a decline of 82.3% from the year-earlier quarter.

Revenue: Fell 4.2% to $70.8 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Acme Packet, Inc. fell short of the mean analyst estimate of 7 cents per share. It beat the average revenue estimate of $69.3 million.

Key Stats:

A year-over-year revenue decrease last quarter breaks a four-quarter streak of revenue increases. The best quarter in that span was the second quarter of the last fiscal year, which saw revenue rise 49.5%.

Gross margin shrank 2.2 percentage points to 80.3%. The contraction appeared to be driven by increased costs, which rose 7.6% from the year-earlier quarter, while revenue fell 4.2%.

The company’s net income has now fallen for three straight quarters. In the fourth quarter of the last fiscal year, net income fell 39.9% from the year earlier, while the figure fell 24.3% in the third quarter of the last fiscal year.

The company has now come in under analyst forecasts for three quarters in a row. It missed the mark by 6 cents in the fourth quarter of the last fiscal year and by 2 cents in the third quarter of the last fiscal year.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the second quarter has moved down from 21 cents a share to 11 cents over the last ninety days. At 63 cents per share, the average estimate for the fiscal year has fallen from 92 cents ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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