The 10-second takeaway
For the quarter ended Feb. 29 (Q1), OMNOVA Solutions beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted and GAAP earnings per share improved significantly.
Margins grew across the board.
OMNOVA Solutions booked revenue of $275.9 million. The one analyst polled by S&P Capital IQ expected to see revenue of $259.5 million on the same basis. GAAP reported sales were 4.4% lower than the prior-year quarter's $288.7 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 $0.22. The four earnings estimates compiled by S&P Capital IQ predicted $0.11 per share on the same basis. GAAP EPS of $0.28 for Q1 were much higher than the prior-year quarter's $0.02 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 22.1%, 150 basis points better than the prior-year quarter. Operating margin was 8.5%, 210 basis points better than the prior-year quarter. Net margin was 4.6%, 430 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $315.0 million. On the bottom line, the average EPS estimate is $0.14.
Next year's average estimate for revenue is $1.23 billion. The average EPS estimate is $0.53.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 150 members out of 166 rating the stock outperform, and 17 members rating it underperform. Among 29 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 28 give OMNOVA Solutions a green thumbs-up, and one give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on OMNOVA Solutions is buy, with an average price target of $7.33.
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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.