The 10-second takeaway
For the quarter ended March 31 (Q1), DST Systems crushed expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share grew.
Margins contracted across the board.
DST Systems booked revenue of $653.2 million. The five analysts polled by S&P Capital IQ predicted revenue of $500.8 million on the same basis. GAAP reported sales were 10% higher than the prior-year quarter's $591.7 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 $1.05. The four earnings estimates compiled by S&P Capital IQ averaged $1.04 per share. GAAP EPS of $1.22 for Q1 were 4.3% higher than the prior-year quarter's $1.17 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 14.4%, 330 basis points worse than the prior-year quarter. Operating margin was 9.2%, 340 basis points worse than the prior-year quarter. Net margin was 8.5%, 50 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $485.1 million. On the bottom line, the average EPS estimate is $1.00.
Next year's average estimate for revenue is $2.06 billion. The average EPS estimate is $4.10.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 111 members out of 118 rating the stock outperform, and seven members rating it underperform. Among 37 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 36 give DST Systems 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 DST Systems is hold, with an average price target of $55.60.
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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.