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Dolby (DLB) Earnings Surpass Estimates in Q2, Increase Y/Y

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Dolby Laboratories, Inc. (DLB - Free Report) reported second-quarter fiscal 2022 results, with the bottom and top lines surpassing the Zacks Consensus Estimate.

Non-GAAP earnings per share were 92 cents compared with 91 cents reported in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate by 12.2%.

Total revenues in the fiscal second quarter were $334.4 million, up from $319.6 million in the year-ago quarter. Revenues gained from strength in PC and Consumer Electronics, along with improved results for the Dolby Cinemas and Cinemas product businesses. The top line beat the Zacks Consensus Estimate by 0.5%.

Segmental Performance

Revenues from Licensing were $313.8 million, up year over year from $303.5 million.

Dolby Laboratories Price, Consensus and EPS Surprise

 

Dolby Laboratories Price, Consensus and EPS Surprise

Dolby Laboratories price-consensus-eps-surprise-chart | Dolby Laboratories Quote

Broadcast Licensing contributed 33% to the total licensing revenues in the fiscal second quarter. Mobile licensing accounted for 21%, consumer electronics 17%, PC licensing 18% and licensing from other markets contributed 11% to licensing revenues.

Products and services revenues were $20.5 million, up year over year from $15.9 million.

Notably, Disney Star adopted Dolby Atmos for broadcasting the Indian premier league cricket and the popular mobile game, PUBG, is available with Dolby Atmos.

Other Details

Gross profit in the fiscal second quarter was $298.8 million compared with $287.2 million in the year-earlier quarter. Total operating expenses increased to $255.5 million from $203.9 million. Operating income was $43.4 million compared with $83.2 million in the year-ago quarter.

Cash Flow and Liquidity

Dolby generated $94.7 million of net cash from operating activities compared with $165.7 million a year ago. As of Apr 1, 2022, the company had $900.4 million in cash and cash equivalents, with $457.8 million in total liabilities.

Guidance

Dolby provided guidance for the third quarter and fiscal 2022.

For the fiscal third quarter, the company expects GAAP earnings of 28-43 cents per share and non-GAAP earnings of 54-69 cents per share on revenues of $285-$310 million. On a GAAP basis, operating expenses are expected to be $214-$224 million, whereas, on a non-GAAP basis, operating expenses are anticipated to be $185-$195 million.

For fiscal 2022, the company expects GAAP earnings of $1.98-$2.48 per share and non-GAAP earnings of $3.27-$3.77 per share on revenues of $1.3-$1.35 billion. On a GAAP basis, operating expenses are expected to be $905-$925 million, whereas, on a non-GAAP basis, operating expenses are anticipated to be $745-$765 million.

Zacks Rank & Stocks to Consider

Dolby currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader industry are Target Hospitality (TH - Free Report) , Funko (FNKO - Free Report) and Civeo (CVEO - Free Report) . Target, Funko and Civeo currently sport a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Target’s fiscal 2022 earnings is pegged at 9 cents per share, rising 50% in the past 60 days. The long-term earnings growth rate is anticipated to be 15%.

Shares of Target have gained 179.8% in the past year.

The Zacks Consensus Estimate for Funko’s fiscal 2022 earnings is pegged at $1.80 per share, rising 9.75% in the past 60 days. The long-term earnings growth rate is anticipated to be 40.4%.

Funko’s earnings beat the Zacks Consensus Estimate in all of the last four quarters, the average being 96.3%. Shares of Funko have declined 21.2% in the past year.

The Zacks Consensus Estimate for Civeo’s fiscal 2022 earnings is pegged at 54 cents per share, rising 93% in the past 60 days. The long-term earnings growth rate is anticipated to be 10%.

Civeo’s earnings beat the Zacks Consensus Estimate in all of the last four quarters, the average being 1565%. Shares of Civeo have grown 69.7% in the past year.

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