Dolby's (DLB) Q4 Earnings & Revenues Beat Estimates, Up Y/Y
Dolby Laboratories, Inc DLB reported fourth-quarter fiscal 2023 results, with non-GAAP earnings per share (EPS) of 65 cents compared with 54 cents reported in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate of 52 cents.
Total revenues were $290.6 million, up from $278.2 million in the year-ago quarter. The top line surpassed the Zacks Consensus Estimate by 1.46%. The uptick was caused by increased adoption of Dolby Atmos and Dolby Vision.
The company announced a dividend of 30 cents per share, payable on Dec 5, to shareholders of record on Nov 28, 2023.
Dolby Laboratories Price, Consensus and EPS Surprise
Dolby Laboratories price-consensus-eps-surprise-chart | Dolby Laboratories Quote
Segmental Performance
Revenues from Licensing were $265.2 million, up from $249.1 million reported in the prior-year quarter. Products and Services’ revenues were $25.3 million compared with $29.1 million reported in the year-ago quarter.
Broadcast Licensing contributed 39% to the total licensing revenues in the fiscal fourth quarter. Mobile Licensing accounted for 14%, Consumer Electronics 16%, PC Licensing 10% and Licensing from Other Markets contributed 22% to licensing revenues.
Other Details
Gross profit in the fiscal fourth quarter was $255.1 million compared with $241.1 million in the year-ago quarter. Total operating expenses increased to $258.5 million from $213.9 million reported in the year-ago quarter.
Operating loss was $3.5 million against the operating income of $27.1 million in the year-ago quarter.
In the fiscal fourth quarter, the company repurchased 0.3 million of its common shares and ended the quarter with $212 million of stock repurchase authorization.
Cash Flow and Liquidity
In the fiscal fourth quarter, Dolby generated $85 million of net cash from operating activities compared with $51.3 million in the prior-year period.
As of Sep 29, 2023, the company had $745.4 million in cash and cash equivalents, with $607.6 million in total liabilities.
2024 Guidance
For the first quarter of fiscal 2024, the company expects GAAP EPS of 44-59 cents and non-GAAP EPS of 80-95 cents on revenues of $300-$330 million.
On a GAAP basis, operating expenses are expected to be in the range of $220-$230 million, whereas, on a non-GAAP basis, operating expenses are anticipated to be between $180 million and $190 million.
For fiscal 2024, the company expects revenues to be $1.30 billion. GAAP operating margin is expected to be 20%, while the non-GAAP operating margin is expected to be nearly 32%.
On a GAAP basis, operating expenses are expected to be between $885 million and $895 million, whereas, on a non-GAAP basis, operating expenses are anticipated to be in the range of $740-$750 million. The company expects GAAP EPS of $2.30-$2.45 and non-GAAP EPS of $3.60-$3.75.
Zacks Rank & Stocks to Consider
Dolby currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology space are Guidewire Software GWRE, Flex FLEX and Badger Meter BMI. Each stock presently sports 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 Guidewire Software’s fiscal 2024 EPS has increased 10.5% in the past 60 days to 74 cents. Shares of GWRE have soared 47.1% in the past year.
The Zacks Consensus Estimate for Flex’s fiscal 2024 EPS has gained 3.6% in the past 60 days to $2.56. Flex’s long-term earnings growth rate is 12.4%. Shares of FLEX have gained 29.5% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 EPS has improved 7.3% in the past 60 days to $3.07.
Badger Meter’s earnings outpaced the Zacks Consensus Estimate in all the last four quarters, the average surprise being 10.3%. Shares of BMI have rallied 24.6% in the past year.
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