The 10-second takeaway
For the quarter ended March 31 (Q1), Encore Wire met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue contracted and GAAP earnings per share dropped significantly.
Margins dropped across the board.
Encore Wire notched revenue of $280.5 million. The three analysts polled by S&P Capital IQ predicted revenue of $281.6 million on the same basis. GAAP reported sales were 7.5% lower than the prior-year quarter's $303.4 million.
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 $0.29. The three earnings estimates compiled by S&P Capital IQ predicted $0.49 per share. GAAP EPS of $0.29 for Q1 were 37% lower than the prior-year quarter's $0.46 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 8.7%, 240 basis points worse than the prior-year quarter. Operating margin was 3.3%, 180 basis points worse than the prior-year quarter. Net margin was 2.4%, 110 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $299.4 million. On the bottom line, the average EPS estimate is $0.49.
Next year's average estimate for revenue is $1.19 billion. The average EPS estimate is $2.00.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 331 members out of 355 rating the stock outperform, and 25 members rating it underperform. Among 96 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 90 give Encore Wire a green thumbs-up, and six give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Encore Wire is outperform, with an average price target of $36.50.
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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.