The Gory Details on Zipcar's Double Fumble

Zipcar (Nasdaq: ZIP  ) reported earnings on Aug. 2. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Zipcar missed estimates on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue improved significantly and GAAP loss per share dropped.

Margins improved across the board.

Revenue details
Zipcar tallied revenue of $70.8 million. The eight analysts polled by S&P Capital IQ predicted sales of $73.0 million on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $61.6 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 -$0.01. The five earnings estimates compiled by S&P Capital IQ anticipated $0.00 per share. GAAP EPS were -$0.01 for Q2 against -$0.17 per share for the prior-year quarter.

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 38.0%, 380 basis points better than the prior-year quarter. Operating margin was 1.0%, 50 basis points better than the prior-year quarter. Net margin was -0.6%, 840 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $81.5 million. On the bottom line, the average EPS estimate is $0.08.

Next year's average estimate for revenue is $290.9 million. The average EPS estimate is $0.13.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 865 members out of 946 rating the stock outperform, and 81 members rating it underperform. Among 239 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 214 give Zipcar a green thumbs-up, and 25 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Zipcar is outperform, with an average price target of $16.86.

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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. The Motley Fool owns shares of Zipcar. Motley Fool newsletter services recommend Zipcar. 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.

Read/Post Comments (4) | Recommend This Article (2)

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.

  • Report this Comment On August 03, 2012, at 11:58 AM, dbtuner wrote:

    even with these abysmal results, you MF guys are still trying to pump this. Unbelievable.

  • Report this Comment On August 03, 2012, at 12:29 PM, Inmate3030 wrote:

    Wow. You guys are on a roll. First I lose my shirt on Bridgeport Education and now Zipcar. When I used to pick stocks by closing my eyes and pointing to the stock page in the newspaper, I lost money, but not as much as by taking the Fool's advice on stock picks. I bought Zipcar when you told me too around

    $16; any chance you want to buy it back from me around that price? Funny, all of the mutual funds I own are up this year.

  • Report this Comment On August 03, 2012, at 1:20 PM, gelmore1 wrote:

    Based on your recommendation I bought stock at $26, again at $20, again at 12. All based on your recommendation. Your stock picking is horrible!

    I do much better on my own.

  • Report this Comment On August 04, 2012, at 1:04 AM, Clint35 wrote:

    I guess I'm one of the few people who sees a pattern here. A pattern of Zipcar's numbers getting better every quarter. Not as good as what the idiotic analysts expected, but I never listen to them anyway. To all those who locked in your losses by selling at a lower price, I thank you. You've created another buying opportunity for me. Just like last quarter, I now have a chance to buy shares of a growing company with improving fundamentals at a lower price.

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Zipcar CAPS Rating: ****