Fool Checkup: Arcos Dorados Holdings Earnings (ARCO)

Fool Checkup: Arcos Dorados Holdings Earnings

Arcos Dorados Holdings (NYSE: ARCO ) reported earnings on Nov. 2. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Arcos Dorados Holdings missed estimates on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank slightly and GAAP earnings per share increased significantly.

Gross margins contracted, operating margins shrank, net margins expanded.

Revenue details
Arcos Dorados Holdings logged revenue of $961.9 million. The four analysts polled by S&P Capital IQ looked for revenue of $1.02 billion on the same basis. GAAP reported sales were 2.2% lower than the prior-year quarter's $984.0 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 $0.16. The four earnings estimates compiled by S&P Capital IQ forecast $0.16 per share. GAAP EPS of $0.16 for Q3 were 78% higher than the prior-year quarter's $0.09 per share.

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 14.9%, 190 basis points worse than the prior-year quarter. Operating margin was 6.2%, 130 basis points worse than the prior-year quarter. Net margin was 3.4%, 140 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.06 billion. On the bottom line, the average EPS estimate is $0.24.

Next year's average estimate for revenue is $3.89 billion. The average EPS estimate is $0.53.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 572 members out of 583 rating the stock outperform, and 11 members rating it underperform. Among 123 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 121 give Arcos Dorados Holdings a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Arcos Dorados Holdings is outperform, with an average price target of $17.16.

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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 Arcos Dorados. 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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