Graco Crushes Earnings Estimates

Graco (NYSE: GGG  ) reported earnings on April 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 29 (Q1), Graco met expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share increased significantly. GAAP earnings per share expanded significantly.

Gross margins dropped, operating margins expanded, net margins grew.

Revenue details
Graco booked revenue of $269.0 million. The eight analysts polled by S&P Capital IQ expected revenue of $272.1 million on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $234.1 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 $0.88. The eight earnings estimates compiled by S&P Capital IQ predicted $0.73 per share. Non-GAAP EPS of $0.88 for Q1 were 52% higher than the prior-year quarter's $0.58 per share. GAAP EPS of $0.84 for Q1 were 45% higher than the prior-year quarter's $0.58 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 56.0%, 50 basis points worse than the prior-year quarter. Operating margin was 26.6%, 180 basis points better than the prior-year quarter. Net margin was 19.4%, 430 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $283.7 million. On the bottom line, the average EPS estimate is $0.78.

Next year's average estimate for revenue is $1.11 billion. The average EPS estimate is $2.97.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Graco is hold, with an average price target of $58.13.

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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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