Globe Specialty Metals Beats Expectations But Takes A Step Back Anyway

Globe Specialty Metals (Nasdaq: GSM  ) reported earnings on Feb. 8. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Globe Specialty Metals missed estimates on revenues and beat expectations on earnings per share.

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

Gross margins shrank, operating margins contracted, net margins increased.

Revenue details
Globe Specialty Metals reported revenue of $179.9 million. The eight analysts polled by S&P Capital IQ expected to see revenue of $193.2 million on the same basis. GAAP reported sales were 8.7% higher than the prior-year quarter's $165.5 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 $0.15. The eight earnings estimates compiled by S&P Capital IQ predicted $0.13 per share. GAAP EPS of $0.20 for Q2 were 11% higher than the prior-year quarter's $0.18 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 17.6%, 420 basis points worse than the prior-year quarter. Operating margin was 12.5%, 70 basis points worse than the prior-year quarter. Net margin was 8.4%, 30 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $196.1 million. On the bottom line, the average EPS estimate is $0.16.

Next year's average estimate for revenue is $789.5 million. The average EPS estimate is $0.66.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 117 members out of 122 rating the stock outperform, and five members rating it underperform. Among 28 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 26 give Globe Specialty Metals a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Globe Specialty Metals is hold, with an average price target of $15.42.

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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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