Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.

OM Group Beats Expectations but Takes a Step Back Anyway

OM Group (NYSE: OMG  ) reported earnings on May 3. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), OM Group met expectations on revenues and beat expectations on earnings per share.

Compared with the prior-year quarter, revenue expanded significantly and GAAP earnings per share dropped significantly.

Margins shrank across the board.

Revenue details
OM Group tallied revenue of $466.2 million. The one analyst polled by S&P Capital IQ anticipated revenue of $473.0 million on the same basis. GAAP reported sales were 41% higher than the prior-year quarter's $331.3 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.72. The three earnings estimates compiled by S&P Capital IQ anticipated $0.65 per share. GAAP EPS of $0.37 for Q1 were 63% lower than the prior-year quarter's $1.00 per share. (The prior-year quarter included -$0.01 per share in earnings from discontinued operations.)

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 24.2%, 60 basis points worse than the prior-year quarter. Operating margin was 7.4%, 370 basis points worse than the prior-year quarter. Net margin was 2.6%, 670 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $460.9 million. On the bottom line, the average EPS estimate is $0.75.

Next year's average estimate for revenue is $1.54 billion. The average EPS estimate is $2.99.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on OM Group is hold, with an average price target of $39.00.

Over the decades, small-cap stocks like OM Group have provided market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Get instant access to this free report.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings. He is the 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 don't 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.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1881487, ~/Articles/ArticleHandler.aspx, 4/1/2015 12:57:37 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...