Dolby's (DLB) Q3 Earnings Match Estimates, Revenues Up Y/Y
Dolby Laboratories, Inc DLB reported third-quarter fiscal 2023 results, with non-GAAP earnings per share (EPS) of 55 cents compared with 68 cents reported in the prior-year quarter. The bottom line was in line with the Zacks Consensus Estimate of 55 cents.
Total revenues were $298.4 million, up from $289.6 million in the year-ago quarter. The top line missed the Zacks Consensus Estimate by 0.7%. The uptick was caused by revenue growth across all business segments and increased adoption of Dolby Atmos and Dolby Vision.
The company announced a dividend of 27 cents per share, payable on Aug 22, to shareholders of record on Aug 14, 2023.
Dolby Laboratories Price, Consensus and EPS Surprise
Dolby Laboratories price-consensus-eps-surprise-chart | Dolby Laboratories Quote
Segmental Performance
Revenues from Licensing were $273.1 million, up from $269.2 million reported in the prior-year quarter. Products and Services’ revenues were $25.2 million compared with $20.3 million reported in the year-ago quarter.
Broadcast Licensing contributed 38% to the total licensing revenues in the third quarter. Mobile Licensing accounted for 18%, Consumer Electronics 13%, PC Licensing 11% and Licensing from Other Markets contributed 20% to licensing revenues.
Other Details
Gross profit in the fiscal third quarter was $256.8 million compared with $253.6 million in the year-earlier quarter. Total operating expenses increased to $240.9 million from $208.1 million reported in the previous-year quarter.
Operating income was $15.9 million compared with $45.5 million in the year-ago quarter.
In the fiscal third quarter, the company repurchased 0.3 million of its common shares and ended the quarter with $237 million of stock repurchase authorization.
Cash Flow and Liquidity
For the six months that ended on Jun 30, Dolby generated $282.1 million of net cash from operating activities compared with $267.3 million in the prior-year period.
As of Jun 30, 2023, the company had $765.1 million in cash and cash equivalents, with $625.2 million in total liabilities.
Guidance
For the fourth quarter of fiscal 2023, the company expects GAAP EPS of 10-30 cents and non-GAAP EPS of 40-60 cents on revenues of $275-$305 million.
On a GAAP basis, operating expenses are expected to be in the range of $227-$237 million, whereas, on a non-GAAP basis, operating expenses are anticipated to be between $195 million and $205 million.
For fiscal 2023, the company expects revenues in the range of $1.285-$1.315 billion. GAAP operating margin is expected to be 18%, while the non-GAAP operating margin is expected to be nearly 30%. On a GAAP basis, operating expenses are expected to be between $900 million and $910 million, whereas, on a non-GAAP basis, operating expenses are anticipated to be in the range of $760-$770 million.
Zacks Rank & Other Stocks to Consider
Dolby currently has a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology space are InterDigital IDCC, Badger Meter BMI and Woodward WWD. Badger Meter and Woodward sport a Zacks Rank #1 (Strong Buy), whereas InterDigital carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for InterDigital’s 2023 EPS has increased 0.1% in the past 60 days to $8.08. The company’s long-term earnings growth rate is 13.9%.
InterDigital’s earnings beat estimates in all the trailing four quarters, delivering an average surprise of 170.9%. Shares of IDCC have rallied 53.9% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 EPS has increased 4.8% in the past 60 days to $2.82.
Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 6.7%. Shares of BMI have surged 80.5% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2023 EPS has increased 9.7% in the past 60 days to $3.93.
WWD’s long-term earnings growth rate is 13.5%. Shares of WWD have gained 20.2% in the past year.
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