Application Software Subsector Stocks Outperform SKYY in 2015
Revenue falls 7%
On July 30, 2015, NetScout (NTCT) announced its 1Q16 results. It reported revenue of $100.7 million. This is 7% below the revenue of $107.9 million in 1Q15. Non-GAAP (generally accepted accounting principles) for 1Q16 fell by 7% as well. The results for 1Q16 were in line with company expectations.
NetScout stated that “total revenue in last year’s first quarter benefited primarily from the activity of one of NetScout’s tier-one service provider customers who has a purchasing pattern of placing one large order to support deployment plans that span multiple quarters.” In comparison, CA (CA) and Oracle (ORCL) reported revenue of $977 million and $10.70 billion in the last quarter.
Product revenue falls
The total product revenue in 1Q16 stood at $53.6 million. It fell 17% compared to 1Q15. The service revenue rose 8% to $47.1 million in the same period. Income from operations in 1Q16 fell 37% YoY (year-over-year) to $12.4 million. The non-GAAP operating income fell 13% YoY to $21.9 million in the same period.
The net income for 1Q16 was $7.7 million and the EPS (earnings per share) was $0.19—compared to net income of $11.5 million and EPS of $0.27 in 1Q16 on a GAAP basis. The net income for 1Q16 was $13.7 million with an EPS of $0.33—compared to net income of $15.2 million and EPS of $0.36 in 1Q16 on a non-GAAP basis.
Analysts’ expectations
Analysts expected non-GAAP EPS of $0.32 for 1Q16 and revenue of $103.87 million in the same period. For the current fiscal year, analysts estimate an EPS of about $1.84.
You can get diversified exposure to NetScout by investing in the First Trust ISE Cloud Computing Index Fund ETF (SKYY) and the iShares North American Tech-Software ETF (IGV). They hold 0.97% and 0.33% of the stock.
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