The 10-second takeaway
For the quarter ended Dec. 31 (Q1), Sappi Limited missed estimates on revenues and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly and GAAP earnings per share improved.
Gross margins shrank, operating margins dropped, net margins grew.
Sappi Limited logged revenue of $1.59 billion. The two analysts polled by S&P Capital IQ foresaw sales of $1.74 billion on the same basis. GAAP reported sales were 15% lower than the prior-year quarter's $1.87 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.09. The one earnings estimate compiled by S&P Capital IQ averaged $0.00 per share. GAAP EPS of $0.09 for Q1 were 29% higher than the prior-year quarter's $0.07 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 13.1%, 10 basis points worse than the prior-year quarter. Operating margin was 6.8%, 40 basis points worse than the prior-year quarter. Net margin was 2.8%, 80 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1.66 billion. On the bottom line, the average EPS estimate is -$0.02.
Next year's average estimate for revenue is $6.86 billion. The average EPS estimate is $0.38.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 59 members out of 69 rating the stock outperform, and 10 members rating it underperform. Among 27 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 23 give Sappi Limited 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 Limited is hold, with an average price target of $3.15.
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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.