Dolby Laboratories, Inc DLB reported fourth-quarter fiscal 2024 results, with non-GAAP earnings per share (EPS) of 81 cents compared with 65 cents reported in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate of 68 cents. Lower tax rates and higher gross margins were primary growth drivers.
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Total revenues were $304.8 million, up from $290.6 million in the year-ago quarter. The uptick was caused by increased adoption of Dolby Atmos and Dolby Vision. However, the top line missed the Zacks Consensus Estimate by 0.3%.
Dolby Laboratories Price, Consensus and EPS Surprise
Dolby Laboratories price-consensus-eps-surprise-chart | Dolby Laboratories Quote
With a strong foothold in technologies like Dolby Atmos and Dolby Vision, the GE Licensing acquisition strengthening the imaging patent portfolio and a rising presence in real-time interactive streaming via Dolby.io, the company is poised to accelerate its growth and innovation in fiscal 2025.
For fiscal 2025, the company projects Dolby Atmos and Dolby Vision to achieve approximately 15% organic growth, while imaging patents are expected to grow around 15%, as the revenues gained from the GE Licensing acquisition are partly offset by tougher comparisons in the imaging patents segment.
The company announced a dividend of 33 cents per share, payable on Dec. 10, to shareholders of record on Dec. 3, 2024.
Segmental Performance
Revenues from Licensing were $282.7 million, up 6.6% year over year. Products and Services’ revenues fell 12.8% year over year to $22.1 million.
Our estimates were pegged at $282.2 million and $23.2 million for the Licensing and Products and Services revenues, respectively.
Broadcast Licensing contributed 34% to total licensing revenues in the quarter under review. Mobile Licensing, Consumer Electronics, PC Licensing and Licensing from Other Markets accounted for 17%, 15%, 12%, and 22% of licensing revenues, respectively.
For fiscal 2025, management expects Consumer Electronics to be down mid-single digits while the GE Licensing acquisition is likely to drive growth in Mobile in the mid-teens range.
Other Details
Gross profit in the fiscal fourth quarter was $270.8 million compared with $255 million in the year-ago quarter. Total operating expenses decreased to $224.5 million from $258.5 million reported in the year-ago quarter.
Operating income was $46.4 million against an operating loss of $3.5 million in the year-ago quarter.
Cash Flow and Liquidity
For the fiscal year that ended on Sept. 27, Dolby generated $327.3 million of net cash from operating activities compared with $367 million a year ago.
As of Sept. 27, 2024, the company had $482 million in cash and cash equivalents, with $623 million in total liabilities. It had $741.6 million in cash and cash equivalents, with $526.2 million in total liabilities, as of June 30, 2024.
In the fiscal fourth quarter, the company repurchased 251,000 shares of its common shares and ended the quarter with $402 million of stock repurchase authorization.
2025 Outlook
For the first quarter of fiscal 2025, the company estimates revenues between $330 million and $360 million. It expects GAAP EPS of 53-68 cents and non-GAAP EPS between 96 cents and $1.11.
On a GAAP basis, operating expenses are expected to be in the range of $230-$240 million, whereas, on a non-GAAP basis, operating expenses are anticipated to be between $190 million and $200 million.
For fiscal 2025, the company expects revenues to be in the $1.33-$1.39 billion band. GAAP operating margin is expected to be 20%, while the non-GAAP operating margin is expected to be nearly 33%.
On a GAAP basis, operating expenses are expected to be between $908 million and $918 million, whereas, on a non-GAAP basis, operating expenses are anticipated to be in the range of $765-$775 million. The company expects GAAP EPS of $2.43-$2.58 and non-GAAP EPS of $3.99-$4.14.
DLB’s Zacks Rank
Dolby currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Performance of Other Companies
Intrusion Inc. INTZ incurred a third-quarter 2024 loss of 35 cents per share compared with a loss of $2.78 a year ago. The bottom line was narrower than the Zacks Consensus Estimate of a loss of 42 cents.
Shares of INTZ have lost 93% in the past year.
BCE Inc. BCE reported third-quarter 2024 adjusted EPS of C$0.75 (55 cents) compared with C$0.81 in the prior-year quarter. The Zacks Consensus Estimate was pegged at 57 cents.
Shares of BCE have lost 26.4% in the past year.
Itron Inc ITRI reported non-GAAP EPS of $1.84 for third-quarter 2024, which beat the Zacks Consensus Estimate by 62.8%. The company reported earnings of 98 cents in the prior-year quarter.
Shares of ITRI have surged 94.8% in the past year.
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