The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Solutia beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew, and GAAP earnings per share grew significantly.
Gross margins dropped, operating margins shrank, net margins improved.
Solutia booked revenue of $526 million. The six analysts polled by S&P Capital IQ wanted to see sales of $508.4 million. Sales were 7.6% higher than the prior-year quarter's $489 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.49. The eight earnings estimates compiled by S&P Capital IQ predicted $0.47 per share on the same basis. GAAP EPS of $0.62 for Q4 were 15% higher than the prior-year quarter's $0.39 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 29.1%, 60 basis points worse than the prior-year quarter. Operating margin was 16%, 40 basis points worse than the prior-year quarter. Net margin was 10.3%, 70 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $542 million. On the bottom line, the average EPS estimate is $0.52.
Next year's average estimate for revenue is $2.23 billion. The average EPS estimate is $2.19.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 97 members out of 110 rating the stock outperform, and 13 members rating it underperform. Among 42 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 40 give Solutia 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 Solutia is outperform, with an average price target of $22.75.
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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. 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.