Dolby Laboratories Reports Decline in Q1 Profit
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 7h ago
0mins
Source: NASDAQ.COM
- Profit Decline: Dolby Laboratories reported a Q1 net profit of $53.3 million, or $0.55 per share, representing a 21.8% decrease from last year's $67.8 million and $0.70 per share, indicating weakened profitability that may affect investor confidence.
- Revenue Drop: The company's Q1 revenue fell to $346.7 million, down 2.9% from $357.0 million last year, reflecting soft market demand that could negatively impact future growth prospects.
- Future Guidance: Dolby's guidance for the next quarter projects EPS between $1.29 and $1.44, with revenue expected to range from $375 million to $405 million, suggesting some growth potential but requiring close monitoring of market conditions.
- Dividend Announcement: Dolby declared a cash dividend of $0.36 per share, payable on February 18, 2026, to shareholders of record as of February 10, 2026, demonstrating the company's commitment to returning value to shareholders despite declining profits.
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Analyst Views on DLB
Wall Street analysts forecast DLB stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for DLB is 90.00 USD with a low forecast of 85.00 USD and a high forecast of 95.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
3 Analyst Rating
3 Buy
0 Hold
0 Sell
Strong Buy
Current: 61.190
Low
85.00
Averages
90.00
High
95.00
Current: 61.190
Low
85.00
Averages
90.00
High
95.00
About DLB
Dolby Laboratories, Inc. is engaged in designing and manufacturing of audio and imaging hardware and software products for the cinema, television, broadcast and entertainment industries. The two primary components of its licensing business are Branded Technologies, which include Branded Audio Codecs, Dolby Atmos & Dolby Vision, and Patents, which include Audio Patents and Imaging Patents. The Company's cinema imaging products include digital cinema servers used to load, store, decrypt, decode, watermark, and playback digital film files for presentation on digital cinema projectors and software used to encrypt, encode and package digital media files for distribution. Its cinema audio products include cinema processors, amplifiers and loudspeakers used to decode, render, and optimally play back digital cinema soundtracks, including those using Dolby Atmos. It also offers various services to support theatrical and television production for cinema, broadcast, and home entertainment.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Dolby Laboratories to Announce Q1 Earnings on January 29
- Earnings Announcement Date: Dolby Laboratories is set to release its Q1 2023 earnings report on January 29 after market close, with consensus estimates predicting an EPS of $0.99, reflecting a 13.2% year-over-year decline, and revenue expectations of $341.45 million, down 4.4% year-over-year.
- Historical Performance Review: Over the past two years, Dolby has consistently beaten EPS estimates 100% of the time and revenue estimates 75% of the time, indicating strong financial performance and market confidence.
- Expectation Revisions: In the last three months, there have been no upward revisions to EPS estimates, with two downward adjustments, while revenue estimates also saw no upward revisions and four downward adjustments, suggesting a cautious market outlook on the company's future performance.
- Growth Targets: Dolby aims for an annual growth rate of 15%-20% in its Atmos, Vision, and Imaging patents, as consumption-based revenue models expand, reflecting the company's positive outlook on future market opportunities.
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Dolby Laboratories Exceeds Q1 Earnings Expectations
- Earnings Beat: Dolby Laboratories reported Q1 revenue of $347 million and non-GAAP EPS of $1.06, both exceeding the high end of prior guidance, primarily due to earlier deal timing and a $7 million shipment true-up, reflecting strong market performance.
- Cash Flow and Buybacks: The company generated approximately $55 million in operating cash flow, repurchased $70 million in stock, and declared a $0.36 dividend, up 9% year-over-year, indicating a proactive approach to capital management and shareholder returns.
- Growth Potential: Dolby raised its fiscal 2026 revenue guidance to $1.4 to $1.45 billion and non-GAAP EPS to $4.30 to $4.45, implying a 50 to 100 basis point improvement in operating margins, showcasing strong growth potential in automotive and television markets.
- Tech Partnerships and Innovation: Dolby's partnership with Qualcomm integrates its Atmos and Vision technologies into Qualcomm's automotive platform, expanding collaborations with over 35 OEMs, which is expected to enhance its market share in automotive entertainment and streaming.
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