The 10-second takeaway
For the quarter ended March 31 (Q1), Netspend Holdings beat expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share dropped to a loss.
Gross margin grew, operating margin dropped, and net margin contracted.
Netspend Holdings logged revenue of $91.4 million. The 15 analysts polled by S&P Capital IQ predicted a top line of $87.2 million on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $80.8 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 $0.12. The seven earnings estimates compiled by S&P Capital IQ predicted $0.11 per share. GAAP EPS were -$0.08 for Q1 versus $0.08 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 33.1%, 130 basis points better than the prior-year quarter. Operating margin was -9.8%, 2,620 basis points worse than the prior-year quarter. Net margin was -6.3%, 1,590 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $82.7 million. On the bottom line, the average EPS estimate is $0.11.
Next year's average estimate for revenue is $341.6 million. The average EPS estimate is $0.46.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 30 members out of 30 rating the stock outperform. Among 11 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), all 11 give Netspend Holdings a green thumbs-up.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Netspend Holdings is outperform, with an average price target of $9.54.
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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.