The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Federated Investors missed on revenue and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted, and GAAP earnings per share dropped significantly.
Margins dropped across the board.
Federated Investors reported revenue of $216.4 million. The seven analysts polled by S&P Capital IQ expected sales of $229.2 million. Sales were 12% lower than the prior-year quarter's $245.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.36. The nine earnings estimates compiled by S&P Capital IQ predicted $0.39 per share on the same basis. GAAP EPS of $0.37 for Q4 were 22% lower than the prior-year quarter's $0.46 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 71.4%, 500 basis points worse than the prior-year quarter. Operating margin was 28.6%, 770 basis points worse than the prior-year quarter. Net margin was 17.1%, 180 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $164.9 million. On the bottom line, the average EPS estimate is $0.38.
Next year's average estimate for revenue is $920.6 million. The average EPS estimate is $1.61.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 287 members out of 307 rating the stock outperform, and 20 members rating it underperform. Among 100 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 96 give Federated Investors 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 Federated Investors is hold, with an average price target of $18.75.
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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. Motley Fool newsletter services have recommended buying shares of Federated Investors. 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.