The 10-second takeaway
For the quarter ended March 31 (Q1), Federated Investors missed estimates on revenues and crushed expectations on earnings per share.
Compared with the prior-year quarter, revenue contracted and GAAP earnings per share expanded significantly.
Margins improved across the board.
Federated Investors booked revenue of $230.3 million. The five analysts polled by S&P Capital IQ anticipated sales of $238.6 million on the same basis. GAAP reported sales were 3.6% lower than the prior-year quarter's $238.9 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 $0.52. The nine earnings estimates compiled by S&P Capital IQ forecast $0.38 per share. GAAP EPS of $0.41 for Q1 were 28% higher than the prior-year quarter's $0.32 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 72.2%, 30 basis points better than the prior-year quarter. Operating margin was 30.5%, 680 basis points better than the prior-year quarter. Net margin was 18.4%, 450 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $239.7 million. On the bottom line, the average EPS estimate is $0.40.
Next year's average estimate for revenue is $962.9 million. The average EPS estimate is $1.63.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 294 members out of 315 rating the stock outperform, and 21 members rating it underperform. Among 94 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 90 give Federated Investors 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 Federated Investors is underperform, with an average price target of $18.68.
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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. He is the 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 Federated Investors. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.