The 10-second takeaway
For the quarter ended Sep. 30 (Q1), Education Management met expectations on revenues and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share dropped to a loss.
Margins contracted across the board.
Education Management chalked up revenue of $609.6 million. The 12 analysts polled by S&P Capital IQ expected a top line of $614.0 million on the same basis. GAAP reported sales were 11% lower than the prior-year quarter's $682.1 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at -$0.04. The 11 earnings estimates compiled by S&P Capital IQ predicted -$0.08 per share. GAAP EPS were -$0.11 for Q1 against $0.21 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 37.4%, 1,400 basis points worse than the prior-year quarter. Operating margin was 1.6%, 960 basis points worse than the prior-year quarter. Net margin was -2.1%, 610 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $668.3 million. On the bottom line, the average EPS estimate is $0.19.
Next year's average estimate for revenue is $2.54 billion. The average EPS estimate is $0.50.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 34 members out of 62 rating the stock outperform, and 28 members rating it underperform. Among 17 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), six give Education Management a green thumbs-up, and 11 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Education Management is hold, with an average price target of $5.19.
- Add Education Management to My Watchlist.