The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Churchill Downs met expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded and GAAP earnings per share improved. The non-GAAP profit was a surprise, as analysts had predicted a loss.
Gross margin dropped, operating margin increased, and net margin improved.
Churchill Downs logged revenue of $149.3 million. The one analyst polled by S&P Capital IQ expected sales of $148.7 million on the same basis. GAAP reported sales were 14% lower than the prior-year quarter's $174.0 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.25. The one earnings estimate compiled by S&P Capital IQ predicted -$0.01 per share on the same basis. GAAP EPS were $0.44 for Q4 compared to -$0.11 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 17.8%, 8,450 basis points worse than the prior-year quarter. Operating margin was 4.2%, 570 basis points better than the prior-year quarter. Net margin was 5.1%, 620 basis points better than the prior-year quarter.
On the bottom line, the average EPS estimate is -$0.15.
Next year's average estimate for revenue is $704.9 million. The average EPS estimate is $3.05.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 53 members out of 74 rating the stock outperform, and 21 members rating it underperform. Among 27 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 20 give Churchill Downs a green thumbs-up, and seven give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Churchill Downs is buy, with an average price target of $70.50.
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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.