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Why Is Dolby Laboratories (DLB) Up 1.8% Since Last Earnings Report?
Dolby LaboratoriesDolby Laboratories(US:DLB) ZACKSยท2024-09-06 16:37

Core Viewpoint - Dolby Laboratories reported a mixed performance in its latest earnings, with non-GAAP EPS exceeding estimates while revenues declined year-over-year, prompting a cautious outlook for the remainder of the fiscal year [2][3][10]. Financial Performance - Dolby's Q3 fiscal 2024 non-GAAP EPS was 71 cents, up from 55 cents in the prior-year quarter, surpassing the Zacks Consensus Estimate by 20.3% [2] - Revenues for the quarter were $288.8 million, a decline of 3% year-over-year, but still beating the Zacks Consensus Estimate by 0.9% [2] - Gross profit decreased to $253.1 million from $256.8 million in the year-ago quarter, while total operating expenses fell to $216.3 million from $240.9 million [6] Segment Performance - Licensing revenues were $267 million, down 2% year-over-year, while Products and Services revenues fell 14% to $21.7 million due to weak box office trends and device sales [4] - Broadcast Licensing contributed 36% to total licensing revenues, with Mobile Licensing, Consumer Electronics, PC Licensing, and Other Markets accounting for 11%, 10%, 15%, and 19% respectively [5] Cash Flow and Share Repurchase - For the six months ending June 30, Dolby generated $211.1 million in net cash from operating activities, down from $282.1 million in the prior-year period [7] - The company repurchased nearly 423,000 shares during the quarter, with $72 million remaining in its stock repurchase authorization, and an increase of $350 million to its stock repurchase program was approved [8] Outlook - For Q4 fiscal 2024, Dolby expects GAAP EPS between 31-46 cents and non-GAAP EPS between 61-76 cents, with revenues projected at $300-$320 million [9] - Full-year revenue estimates have been revised down to $1.27-$1.29 billion from a previous estimate of $1.3 billion due to lower-than-anticipated shipments and cinema revenues [10] - Dolby anticipates GAAP operating margin at 20% and non-GAAP operating margin at nearly 31% for the fiscal year [11] Estimate Trends - Recent estimates have shown a downward trend, with the consensus estimate shifting down by 21.39% [12] - Dolby Laboratories currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [14]