The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Covance 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.
Margins dropped across the board.
Covance reported revenue of $544.8 million. The 13 analysts polled by S&P Capital IQ anticipated a top line of $546.5 million on the same basis. GAAP reported sales were 10% higher than the prior-year quarter's $543.3 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 $0.72. The 17 earnings estimates compiled by S&P Capital IQ predicted $0.67 per share. GAAP EPS of $0.69 for Q3 were 3.0% higher than the prior-year quarter's $0.67 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 26.0%, 340 basis points worse than the prior-year quarter. Operating margin was 5.1%, 530 basis points worse than the prior-year quarter. Net margin was 6.3%, 120 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $553.0 million. On the bottom line, the average EPS estimate is $0.69.
Next year's average estimate for revenue is $2.17 billion. The average EPS estimate is $2.61.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 313 members out of 322 rating the stock outperform, and nine members rating it underperform. Among 110 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 107 give Covance a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Covance is outperform, with an average price target of $51.27.
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