The 10-second takeaway
For the quarter ended March 31 (Q1), Solutia missed estimates on revenue but beat expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank slightly and GAAP earnings per share contracted significantly.
Margins dropped across the board.
Solutia reported revenue of $498 million. The four analysts polled by S&P Capital IQ expected to see revenue of $539.6 million on the same basis. GAAP reported sales were 2.2% lower than the prior-year quarter's $509 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 $0.55. The five earnings estimates compiled by S&P Capital IQ anticipated $0.52 per share. GAAP EPS of $0.43 for Q1 were 20% lower than the prior-year quarter's $0.54 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 31.7%, 10 basis points worse than the prior-year quarter. Operating margin was 15.3%, 430 basis points worse than the prior-year quarter. Net margin was 10.6%, 220 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $571.5 million. On the bottom line, the average EPS estimate is $0.58.
Next year's average estimate for revenue is $2.21 billion. The average EPS estimate is $2.19.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 91 members rating the stock outperform and 12 members rating it underperform. Among 33 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 31 give Solutia 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 Solutia is hold, with an average price target of $27.04.
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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.