The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Convergys beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved slightly and GAAP earnings per share improved.
Gross margins dropped, operating margins grew, and net margins increased.
Convergys reported revenue of $588.9 million. The eight analysts polled by S&P Capital IQ expected sales of $581.4 million. Sales were 2.7% higher than the prior-year quarter's $573.2 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.28. The 10 earnings estimates compiled by S&P Capital IQ anticipated $0.25 per share on the same basis. GAAP EPS were $0.45 for Q4 versus -$1.19 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 37.1%, 40 basis points worse than the prior-year quarter. Operating margin was 8.4%, 120 basis points better than the prior-year quarter. Net margin was 9.3%, 3,450 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $561.1 million. On the bottom line, the average EPS estimate is $0.23.
Next year's average estimate for revenue is $2.32 billion. The average EPS estimate is $1.07.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 94 members out of 113 rating the stock outperform, and 19 members rating it underperform. Among 28 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 25 give Convergys a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Convergys is outperform, with an average price target of $15.56.
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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.