So, the Wheels Came Off Canon's Bus

Canon (NYSE: CAJ  ) reported earnings on Jan. 31. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Canon missed estimates on revenues and whiffed on earnings per share.

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

Gross margins dropped, operating margins contracted, net margins were steady.

Revenue details
Canon booked revenue of $11.00 billion. The 10 analysts polled by S&P Capital IQ anticipated revenue of $11.39 billion on the same basis. GAAP reported sales were 12% lower than the prior-year quarter's $12.54 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 $0.58. The one earnings estimate compiled by S&P Capital IQ averaged $0.77 per share. GAAP EPS of $0.61 for Q4 were 7.6% 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 45.4%, 220 basis points worse than the prior-year quarter. Operating margin was 8.2%, 160 basis points worse than the prior-year quarter. Net margin was 6.4%, about the same as the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $8.95 billion.

Next year's average estimate for revenue is $40.92 billion. The average EPS estimate is $2.63.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 480 members out of 500 rating the stock outperform, and 20 members rating it underperform. Among 154 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 146 give Canon a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Canon is underperform, with an average price target of $36.37.

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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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