Mellanox Technologies Earnings: Here’s Why the Stock is Down Now

Mellanox Technologies, Ltd. (NASDAQ:MLNX) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 1.65%.

Mellanox Technologies, Ltd. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 69.7% to $0.30 in the quarter versus EPS of $0.99 in the year-earlier quarter.

Revenue: Decreased 26.43% to $98.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Mellanox Technologies, Ltd. reported adjusted EPS income of $0.30 per share. By that measure, the company beat the mean analyst estimate of $0.20. It beat the average revenue estimate of $96.38 million.

Quoting Management: “We are pleased with our Q2 results. We see growth in the demand of our InfiniBand and Ethernet products. We increased our Ethernet top-of-rack switch system revenue by 81 percent sequentially, and, although off of a small base, we believe this indicates our growth opportunity once we have all the building blocks required for the various markets we serve,” said Eyal Waldman, president and CEO of Mellanox Technologies. “Our acquisitions of Kotura and IPtronics solidify our strategy to provide full end-to-end 100Gb/s server and storage interconnect solutions to the high-performance computing, cloud, Web 2.0, storage and data center markets.”

Key Stats (on next page)…

Revenue increased 18.2% from $83.08 million in the previous quarter. EPS increased 200% from $0.10 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.55 to a profit $0.42. For the current year, the average estimate has moved down from a profit of $1.70 to a profit of $1.33 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)