iSoftStone Holdings Beats on Both Top and Bottom Lines

iSoftStone Holdings (NYSE: ISS  ) reported earnings on May 17. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), iSoftStone Holdings beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share contracted. GAAP earnings per share dropped.

Gross margins were steady, operating margins dropped, net margins dropped.

Revenue details
iSoftStone Holdings booked revenue of $95.9 million. The two analysts polled by S&P Capital IQ predicted a top line of $93.9 million on the same basis. GAAP reported sales were 11% higher than the prior-year quarter's $86.3 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.10. The two earnings estimates compiled by S&P Capital IQ predicted $0.09 per share. Non-GAAP EPS of $0.10 for Q1 were 17% lower than the prior-year quarter's $0.12 per share. GAAP EPS of $0.05 for Q1 were 17% lower than the prior-year quarter's $0.06 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 32.2%, much about the same as the prior-year quarter. Operating margin was 4.7%, 50 basis points worse than the prior-year quarter. Net margin was 3.2%, 60 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $111.8 million. On the bottom line, the average EPS estimate is $0.17.

Next year's average estimate for revenue is $464.7 million. The average EPS estimate is $0.67.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 19 members out of 36 rating the stock outperform, and 17 members rating it underperform. Among 13 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), eight give iSoftStone Holdings a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on iSoftStone Holdings is outperform, with an average price target of $10.83.

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