Dolby announced that its revenue for the third quarter of its 2012 fiscal year was $207.9m, down 5% versus the same period a year ago, and up 12% versus the previous quarter. GAAP net income in the quarter was $51.5m, or $0.48 per share, down from $61.7m, or $0.55 per share, last year, and $88.1m last quarter. On a non-GAAP basis, third quarter net income was $60.8m, or $0.57 per share, compared to $72.8m, or $0.65 per share, last year.
The results were below the expectations of equity analysts, who were on average looking for revenue of $218.3m and earnings of $0.58 per share. Investors did not like the news, and sent Dolby’s shares down by more than 14% on the day after the company’s earnings were announced.
Licensing revenue during the quarter was $178.4m, a decrease of 2% versus last year, and a decrease of 21% versus the previous quarter. Dolby CFO Lewis Chew attributed the year-over-year decline to the company’s CE and PC markets, but said the drop was partially offset by growth the broadcast market. Chew said the quarter-over-quarter decline was mainly due to seasonality since the increased shipment activity during the holiday period was reflected in Dolby’s fiscal Q2 revenues.
Product revenue in the quarter was $22.1m, down 22% versus last year, and down 19% versus last quarter. Product revenue declined due to lower shipments of 3D and digital cinema systems.
Service revenue in the quarter was $7.3m, down 17% versus last year, and down 5% versus last quarter.
GAAP gross margins for the quarter were 89.9%, down from 91% last quarter. Non-GAAP gross margins were 90.8%. Gross margins from licensing were 98.4%. Product gross margins in the quarter were 34.4%.
On the company’s conference call with equity analysts, Dolby CEO Kevin Yeaman said “we are seeing underlying softness in some of the product categories we license due to general weakness in the global economy. While this impacted our third quarter results and full year outlook, we continue to make progress in many of our key initiatives to better position us for long-term growth. We expect this growth to come from platforms like cloud-based delivery and digital broadcast.”
Financial Guidance Revised Down
Dolby says it is now anticipating total for the full fiscal year 2012 to be in the range of $900m to $920m, down from the range of $910m to $960m discussed last quarter. Gross margins for the year are expected to be approximately 90%. Full year 2011 revenue was $955.5m.
Press Release: Dolby Laboratories Reports Third Quarter Fiscal 2012 Results
Previous quarter: Dolby Announces Q2 2012 Results, Says Its Technology Will be Included in Windows 8
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