NEW YORK (TheStreet) -- Dot Hill Systems (HILL - Get Report) was plunging 18.96% to $4.83 at 10:41 a.m. on Thursday after the company, which manages and protects data, reported its fourth-quarter earnings.
The company reported net income of $2.2 million, or 4 cents a share, up from a net loss of $5 million, or 9 cents a share, in the fourth quarter one year earlier. Non-GAAP net income totaled $4.2 million, or 7 cents a share, up year over year from a net loss of $2 million, or 3 cents a share. Net revenue totaled $58.8 million, an increase from $44.1 million in the same period one year earlier. Non-GAAP net revenue increased year over year to $59.7 million from $46.2 million.
Dot Hill also issued guidance for the first quarter of the fiscal year 2014 and expects earnings per share in the range of flat to 1 cent. The company also expects non-GAAP net revenue of $47 million to $50 million. For the full year, Dot Hill expects earnings per share of 18 cents to 29 cents, and non-GAAP net revenue of $220 million to $255 million.
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TheStreet Ratings team rates DOT HILL SYSTEMS CORP as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate DOT HILL SYSTEMS CORP (HILL) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HILL's revenue growth has slightly outpaced the industry average of 4.6%. Since the same quarter one year prior, revenues slightly increased by 9.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- HILL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, HILL has a quick ratio of 1.59, which demonstrates the ability of the company to cover short-term liquidity needs.
- DOT HILL SYSTEMS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DOT HILL SYSTEMS CORP reported poor results of -$0.18 versus -$0.15 in the prior year. This year, the market expects an improvement in earnings ($0.16 versus -$0.18).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, DOT HILL SYSTEMS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for DOT HILL SYSTEMS CORP is currently lower than what is desirable, coming in at 33.70%. Regardless of HILL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, HILL's net profit margin of 3.33% is significantly lower than the industry average.
- You can view the full analysis from the report here: HILL Ratings Report