Universal Stainless & Alloy Products Beats Estimates But Has a Big Earnings Drop

Universal Stainless & Alloy Products (Nasdaq: USAP  ) reported earnings on Jan. 29. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Universal Stainless & Alloy Products met expectations on revenues and beat expectations on earnings per share.

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

Margins dropped across the board.

Revenue details
Universal Stainless & Alloy Products reported revenue of $47.2 million. The one analyst polled by S&P Capital IQ hoped for sales of $47.4 million on the same basis. GAAP reported sales were 24% lower than the prior-year quarter's $62.2 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 $0.24. The four earnings estimates compiled by S&P Capital IQ predicted $0.16 per share. GAAP EPS of $0.16 for Q4 were 73% lower than the prior-year quarter's $0.59 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 12.7%, 640 basis points worse than the prior-year quarter. Operating margin was 3.7%, 420 basis points worse than the prior-year quarter. Net margin was 2.3%, 450 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $62.2 million. On the bottom line, the average EPS estimate is $0.27.

Next year's average estimate for revenue is $273.2 million. The average EPS estimate is $2.18.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 381 members out of 403 rating the stock outperform, and 22 members rating it underperform. Among 85 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 84 give Universal Stainless & Alloy Products a green thumbs-up, and one give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Universal Stainless & Alloy Products is outperform, with an average price target of $51.50.

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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 position in any of the stocks mentioned. 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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