Rentech Posts a Surprise Profit

Rentech (AMEX: RTK) reported earnings on Nov. 8. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Rentech crushed expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share expanded. The profit was a surprise, as analysts had predicted a loss.

Margins grew across the board.

Revenue details
Rentech logged revenue of $60.2 million. The three analysts polled by S&P Capital IQ expected to see revenue of $44.2 million on the same basis. GAAP reported sales were 56% higher than the prior-year quarter's $38.6 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 $0.02. The three earnings estimates compiled by S&P Capital IQ averaged -$0.02 per share. GAAP EPS were $0.02 for Q3 compared to -$0.27 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 58.2%, 1,330 basis points better than the prior-year quarter. Operating margin was 27.8%, 2,220 basis points better than the prior-year quarter. Net margin was 7.1%, 16,010 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $60.5 million. On the bottom line, the average EPS estimate is $0.00.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 353 members out of 404 rating the stock outperform, and 51 members rating it underperform. Among 55 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 36 give Rentech a green thumbs-up, and 19 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Rentech is outperform, with an average price target of $3.94.

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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 has no positions in the stocks mentioned above. 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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