The 10-second takeaway
For the quarter ended Oct. 2 (Q4), Sappi met expectations on revenues and whiffed on earnings per share.
Compared to the prior-year quarter, revenue increased slightly, and earnings per share contracted significantly.
Margins shrank across the board.
Sappi chalked up revenue of $1.78 billion. The three analysts polled by S&P Capital IQ expected to see revenue of $1.8 billion. Sales were 0.7% higher than the prior-year quarter's $1.77 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.02. The two earnings estimates compiled by S&P Capital IQ averaged $0.04 per share on the same basis. GAAP EPS were -$0.25 for Q4 versus $0.16 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 11.5%, 260 basis points worse than the prior-year quarter. Operating margin was 4.1%, 180 basis points worse than the prior-year quarter. Net margin was -7.1%, 1,180 basis points worse than the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods.
What does the future hold?
Next quarter's average estimate for revenue is $1.75 billion. On the bottom line, the average EPS estimate is $0.02. (There are two revenue estimates and one EPS estimate.)
For the full year ending 2012, the average estimate for revenue is $7.07 billion. The average EPS estimate is $0.22. (There are nine revenue estimates and three EPS estimates.)
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 60 members out of 70 rating the stock outperform, and 10 members rating it underperform. Among 22 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 18 give Sappi a green thumbs-up, and four give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Sappi is hold, with an average price target of $4.23.
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