The 10-second takeaway
For the quarter ended March 31 (Q1), Scientific Games beat expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share expanded.
Margins improved across the board.
Scientific Games booked revenue of $234.6 million. The five analysts polled by S&P Capital IQ looked for sales of $228.1 million on the same basis. GAAP reported sales were 19% higher than the prior-year quarter's $196.7 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 $0.03. The five earnings estimates compiled by S&P Capital IQ forecast $0.06 per share. GAAP EPS were $0.02 for Q1 against -$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 43.4%, 30 basis points better than the prior-year quarter. Operating margin was 10.7%, 130 basis points better than the prior-year quarter. Net margin was 0.8%, 430 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $245.7 million. On the bottom line, the average EPS estimate is $0.13.
Next year's average estimate for revenue is $963.1 million. The average EPS estimate is $0.36.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 145 members rating the stock outperform and 19 members rating it underperform. Among 34 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 31 give Scientific Games a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Scientific Games is outperform, with an average price target of $13.38.
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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.