Global Power Equipment Group Increases Sales but Misses Estimates on Earnings

Global Power Equipment Group (Nasdaq: GLPW  ) reported earnings on Nov. 8. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Global Power Equipment Group whiffed on revenues and missed estimates on earnings per share.

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

Margins contracted across the board.

Revenue details
Global Power Equipment Group reported revenue of $111.5 million. The six analysts polled by S&P Capital IQ predicted net sales of $141.0 million on the same basis. GAAP reported sales were 12% higher than the prior-year quarter's $99.2 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 $0.13. The five earnings estimates compiled by S&P Capital IQ predicted $0.34 per share. GAAP EPS of $0.09 for Q3 were 92% lower than the prior-year quarter's $1.09 per share. (The prior-year quarter included $0.70 per share in earnings from discontinued operations.)

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 16.3%, 310 basis points worse than the prior-year quarter. Operating margin was 2.3%, 560 basis points worse than the prior-year quarter. Net margin was 1.4%, 1,720 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $157.4 million. On the bottom line, the average EPS estimate is $0.42.

Next year's average estimate for revenue is $497.6 million. The average EPS estimate is $0.90.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 18 members out of 18 rating the stock outperform, and members rating it underperform. Among six CAPS All-Star picks (recommendations by the highest-ranked CAPS members), six give Global Power Equipment Group a green thumbs-up, and give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Global Power Equipment Group is outperform, with an average price target of $25.25.

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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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  • Report this Comment On November 20, 2012, at 7:46 AM, rsinj wrote:

    By what I see, the company has whiffed on the bottom line by a country mile the past three quarters. Is there a reason to believe they'll meet/beat estimates for Q4? Estimates have been lowered about 20% over the past 60 days (was previously flat with a year ago)- how much further will they fall, and how bad will the company actually do? If the company meets current Q4 estimate of 36 cents/share, that gives full year of 55 cents/share and PE of about 25. Let's not discuss PEG because it's way negative.

    The non-GAAP discussion is irrelevant, GAAP is all that matters.

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