The 10-second takeaway
For the quarter ended March 31 (Q1), McGraw-Hill Companies beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded and GAAP earnings per share increased.
Gross margins increased, operating margins grew, net margins contracted.
McGraw-Hill Companies reported revenue of $1.33 billion. The seven analysts polled by S&P Capital IQ hoped for revenue of $1.32 billion on the same basis. GAAP reported sales were 5.6% higher than the prior-year quarter's $1.26 billion.
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 $0.51. The seven earnings estimates compiled by S&P Capital IQ predicted $0.48 per share. GAAP EPS of $0.43 for Q1 were 10% higher than the prior-year quarter's $0.39 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 60.3%, 20 basis points better than the prior-year quarter. Operating margin was 19.1%, 200 basis points better than the prior-year quarter. Net margin was 9.2%, 30 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $1.60 billion. On the bottom line, the average EPS estimate is $0.78.
Next year's average estimate for revenue is $6.51 billion. The average EPS estimate is $3.34.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 479 members out of 525 rating the stock outperform, and 47 members rating it underperform. Among 203 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 181 give McGraw-Hill Companies a green thumbs-up, and 22 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on McGraw-Hill Companies is outperform, with an average price target of $50.57.
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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.