Express Scripts Holding Beats on EPS But GAAP Results Lag

Express Scripts Holding (Nasdaq: ESRX  ) reported earnings on Nov. 5. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Express Scripts Holding missed slightly on revenues and beat expectations on earnings per share.

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

Gross margins expanded, operating margins dropped, net margins dropped.

Revenue details
Express Scripts Holding reported revenue of $27.00 billion. The 18 analysts polled by S&P Capital IQ expected to see revenue of $27.46 billion on the same basis. GAAP reported sales were much higher than the prior-year quarter's $11.57 billion.

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 $1.02. The 20 earnings estimates compiled by S&P Capital IQ predicted $0.99 per share. GAAP EPS of $0.47 for Q3 were 29% lower than the prior-year quarter's $0.66 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 7.9%, 70 basis points better than the prior-year quarter. Operating margin was 3.0%, 240 basis points worse than the prior-year quarter. Net margin was 1.4%, 140 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $27.99 billion. On the bottom line, the average EPS estimate is $1.05.

Next year's average estimate for revenue is $95.11 billion. The average EPS estimate is $3.70.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 732 members out of 776 rating the stock outperform, and 44 members rating it underperform. Among 188 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 179 give Express Scripts Holding a green thumbs-up, and nine give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Express Scripts Holding is outperform, with an average price target of $69.15.

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 Express Scripts. Motley Fool newsletter services recommend Express Scripts. 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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