Dolby Q3 Revenue Misses, Net Income Halves; Buyback Boosted by $350M
DLB is trading near its 52-week low of $48.26 (8.3% above the low).
Summary
Dolby Laboratories posted a disappointing fiscal Q3 with revenue of $305M, missing estimates, and net income halving to $28.6M. A $350M boost to the buyback program and upbeat guidance partially offset the negative surprise.
Key Events · Earnings and Guidance · DLB
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Q3 Revenue Miss
Total revenue of $305M fell short of the $312M consensus, as weaker licensing in broadcast ($106.6M, -4.2% YoY) and mobile ($51.0M, -9.4% YoY) weighed on the top line.
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Net Income Halved
GAAP net income dropped to $28.6M ($0.30 EPS) from $46.1M ($0.48 EPS) a year ago, pressured by lower revenue, higher restructuring charges ($3.96M), and a litigation accrual.
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$350M Buyback Expansion
The board authorized a $350M increase to the stock repurchase program, bringing total available to ~$427M. During Q3, Dolby repurchased 1.2M shares for $65M.
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Q4 Guidance Implies Rebound
Q4 revenue guidance of $362M-$392M and non-GAAP EPS of $1.13-$1.28 suggest a significant sequential improvement, with full-year non-GAAP EPS seen at $4.25-$4.40.
Analysis · DLB · Real Estate & Construction
Dolby's fiscal Q3 revenue came in at $305M, missing the $312M consensus, while GAAP net income was cut in half to $28.6M. The shortfall was driven by softness in broadcast and mobile licensing. In a show of confidence, the company raised its share repurchase authorization by $350M, bringing total capacity to roughly $427M, and issued Q4 and full-year guidance that points to a sequential rebound. Still, the earnings miss and restructuring charges raise questions about near-term demand.
At the time of this filing, DLB was trading at $52.26 on NYSE in the Real Estate & Construction sector, with a market capitalization of approximately $4.9B. The 52-week trading range was $48.26 to $76.69. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.