The 10-second takeaway
For the quarter ended Dec. 31 (Q4), SLM beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved slightly and earnings per share grew significantly.
Gross margins contracted, operating margins shrank, and net margins grew.
SLM booked revenue of $879.0 million. The three analysts polled by S&P Capital IQ expected a top line of $732.7 million. Sales were 12% lower than the prior-year quarter's $856.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.51. The five earnings estimates compiled by S&P Capital IQ anticipated $0.49 per share on the same basis. GAAP EPS of $0.99 for Q4 were 21% higher than the prior-year quarter's $0.82 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 69.3%, 3,070 basis points worse than the prior-year quarter. Operating margin was 68.7%, 110 basis points worse than the prior-year quarter. Net margin was 64.5%, 1,480 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $804.5 million. On the bottom line, the average EPS estimate is $0.51.
Next year's average estimate for revenue is $3.72 billion. The average EPS estimate is $2.05.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on SLM is outperform, with an average price target of $17.60.
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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. 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.