CareFusion Beats Analyst Estimates on EPS (CFN)

CareFusion Beats Analyst Estimates on EPS

CareFusion (NYSE: CFN ) reported earnings on Feb. 2. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q2), CareFusion met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted, and GAAP earnings per share grew significantly.

Margins increased across the board.

Revenue details
CareFusion logged revenue of $915 million. The 10 analysts polled by S&P Capital IQ foresaw net sales of $912.3 million. Sales were 8.7% lower than the prior-year quarter's $1 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.44. The 14 earnings estimates compiled by S&P Capital IQ forecast $0.43 per share on the same basis. GAAP EPS of $0.42 for Q2 were 24% higher than the prior-year quarter's $0.34 per share.

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 49.9%, 250 basis points better than the prior-year quarter. Operating margin was 16.4%, 120 basis points better than the prior-year quarter. Net margin was 10.4%, 280 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $893.5 million. On the bottom line, the average EPS estimate is $0.46.

Next year's average estimate for revenue is $3.65 billion. The average EPS estimate is $1.81.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 76 members rating the stock outperform and five members rating it underperform. Among 30 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 30 give CareFusion a green thumbs-up, and none give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on CareFusion is outperform, with an average price target of $29.08.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Report this Comment On February 08, 2012, at 1:02 PM, TMFBent wrote:

Hey folks, there were some non-comparable numbers sent by our data provider that are in this CareFusion piece. Please take a look at the remarks below, sent to me by IR:
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CFN's revenue for fiscal Q2'12 actually rose 3.3% to $915 million on an as-reported and constant currency basis. The comparable year-ago revenue figure for CFN is $886 million. In the story, you used $1 billion for the year-ago period, which doesn't reflect the impact of the April 2011 divestiture of the company's International Surgical Products business. CFN filed adjusted pro forma financial data after the sale of that business.
In the spirit of full disclosure, gross margins declined in the quarter ended Dec. 31, 2011. In the Q2'12 period, CFN's gross margin was 49.9%, 28 basis points below the year-ago quarter. Adjusted operating margin was 16.4%, 54 basis points lower than fiscal Q2'11, while net margin was 10.4%, 24 basis points lower than Q2'11.
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