The 10-second takeaway
For the quarter ended March 31 (Q1), Kadant beat slightly on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share grew significantly.
Gross margins shrank, operating margins improved, and net margins increased.
Kadant chalked up revenue of $84.1 million. The three analysts polled by S&P Capital IQ predicted net sales of $82.8 million on the same basis. GAAP reported sales were 17% higher than the prior-year quarter's $71.7 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 $0.61. The four earnings estimates compiled by S&P Capital IQ averaged $0.42 per share on the same basis. GAAP EPS of $0.60 for Q1 were 28% higher than the prior-year quarter's $0.47 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 45.6%, 200 basis points worse than the prior-year quarter. Operating margin was 12.4%, 80 basis points better than the prior-year quarter. Net margin was 8.4%, 30 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $91.3 million. On the bottom line, the average EPS estimate is $0.53.
Next year's average estimate for revenue is $346.1 million. The average EPS estimate is $2.01.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 163 members out of 184 rating the stock outperform, and 21 members rating it underperform. Among 53 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 51 give Kadant a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Kadant is outperform, with an average price target of $31.33.
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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. Motley Fool newsletter services have recommended buying shares of Kadant. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.