Infoblox Inc. is set to report third-quarter fiscal 2016 results on May 25. Last quarter, the company posted a positive earnings surprise of 175%. Let us see how things are shaping up for this announcement.
Factors to Consider
Infoblox operates as an automated network controller and provides an appliance-based solution that according to the company helps in protecting “Domain Name System (DNS) infrastructure, automate cloud deployments, and increase the reliability of enterprise and service provider networks around the world. As the industry leader in DNS, DHCP, and IP address management, the category known as DDI, Infoblox reduces the risk and complexity of networking.”
Infoblox recently provided preliminary results for the third quarter of fiscal 2016 as well as updated its fiscal 2016 financial guidance. For the third quarter of fiscal 2016, Infoblox expects total revenue in the range of $81 million to $82 million (mid-point $81.5 million) compared with the prior guidance of $91 million to $93 million. The Zacks Consensus Estimate is pegged at $82 million.
Non-GAAP gross margin is expected to be in a range of 78.5% to 79% (previously 79% to 80%). Non-GAAP operating margin is expected to be in a range of 5% to 6%. The company expects non-GAAP earnings for the third quarter of fiscal 2016 in a range of 5 cents per share to 6 cents per share.
For fiscal 2016, the company lowered its revenue guidance. Infoblox now expects total revenues in a range of $354 million to $358 million (previously $370 million to $380 million) The Zacks Consensus Estimate is pegged at $364 million. Non-GAAP operating margin is expected to be around 11%.
According to Jesper Andersen, president and chief executive officer of Infoblox."We are disappointed that our expected revenue for the third fiscal quarter and fiscal year will fall below our original outlook, driven in part by the general softness in IT spending that is also being reported by other enterprise vendors." Also, lower-than-expectedproduct upgrade cycle contributed to the lower outlook.
Nonetheless, Infoblox has been witnessing better-than-expected demand for its DDI and DNS solutions, which should boost revenues in the to-be-reported quarter. Furthermore, the company has successfully gained customers every quarter, and we anticipate the trend to continue in fiscal third quarter and boost top-line performance.
However, competition from the likes of International Business Machines Corporation (IBM - Free Report) and Hewlett-Packard Enterprises remains a headwind.
Earnings Whispers
Our proven model does not conclusively show that Infoblox is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here, as you will see below.
Negative Zacks ESP: Its Earnings ESP is -7.14% as the Most Accurate estimate stands at a loss of 15 cents while the Zacks Consensus Estimate stands at a loss of 14 cents.
Zacks Rank: Infoblox’s Zacks Rank #3 (Hold) when combined with a -7.14% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a few companies worth considering which, as per our model, have the right combination of elements to post an earnings beat this quarter:
TiVo Inc. , with an Earnings ESP of +25.00% and a Zacks Rank #1
Intuit Inc. (INTU - Free Report) , with an Earnings ESP of +0.66% and a Zacks Rank #2
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Infoblox Inc. is set to report third-quarter fiscal 2016 results on May 25. Last quarter, the company posted a positive earnings surprise of 175%. Let us see how things are shaping up for this announcement.
Factors to Consider
Infoblox operates as an automated network controller and provides an appliance-based solution that according to the company helps in protecting “Domain Name System (DNS) infrastructure, automate cloud deployments, and increase the reliability of enterprise and service provider networks around the world. As the industry leader in DNS, DHCP, and IP address management, the category known as DDI, Infoblox reduces the risk and complexity of networking.”
Infoblox recently provided preliminary results for the third quarter of fiscal 2016 as well as updated its fiscal 2016 financial guidance. For the third quarter of fiscal 2016, Infoblox expects total revenue in the range of $81 million to $82 million (mid-point $81.5 million) compared with the prior guidance of $91 million to $93 million. The Zacks Consensus Estimate is pegged at $82 million.
Non-GAAP gross margin is expected to be in a range of 78.5% to 79% (previously 79% to 80%). Non-GAAP operating margin is expected to be in a range of 5% to 6%. The company expects non-GAAP earnings for the third quarter of fiscal 2016 in a range of 5 cents per share to 6 cents per share.
For fiscal 2016, the company lowered its revenue guidance. Infoblox now expects total revenues in a range of $354 million to $358 million (previously $370 million to $380 million) The Zacks Consensus Estimate is pegged at $364 million. Non-GAAP operating margin is expected to be around 11%.
According to Jesper Andersen, president and chief executive officer of Infoblox."We are disappointed that our expected revenue for the third fiscal quarter and fiscal year will fall below our original outlook, driven in part by the general softness in IT spending that is also being reported by other enterprise vendors." Also, lower-than-expectedproduct upgrade cycle contributed to the lower outlook.
Nonetheless, Infoblox has been witnessing better-than-expected demand for its DDI and DNS solutions, which should boost revenues in the to-be-reported quarter. Furthermore, the company has successfully gained customers every quarter, and we anticipate the trend to continue in fiscal third quarter and boost top-line performance.
However, competition from the likes of International Business Machines Corporation (IBM - Free Report) and Hewlett-Packard Enterprises remains a headwind.
Earnings Whispers
Our proven model does not conclusively show that Infoblox is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here, as you will see below.
Negative Zacks ESP: Its Earnings ESP is -7.14% as the Most Accurate estimate stands at a loss of 15 cents while the Zacks Consensus Estimate stands at a loss of 14 cents.
Zacks Rank: Infoblox’s Zacks Rank #3 (Hold) when combined with a -7.14% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a few companies worth considering which, as per our model, have the right combination of elements to post an earnings beat this quarter:
TiVo Inc. , with an Earnings ESP of +25.00% and a Zacks Rank #1
Intuit Inc. (INTU - Free Report) , with an Earnings ESP of +0.66% and a Zacks Rank #2
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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