The 10-second takeaway
For the quarter ended March 31 (Q1), Covance met expectations on revenues and earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share increased.
Gross margins contracted, operating margins contracted, and net margins expanded.
Covance reported revenue of $530.8 million. The 13 analysts polled by S&P Capital IQ expected a top line of $531.9 million on the same basis. GAAP reported sales were 5.7% higher than the prior-year quarter's $502.0 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 $0.60. The 17 earnings estimates compiled by S&P Capital IQ anticipated $0.60 per share. GAAP EPS of $0.60 for Q1 were 11% higher 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 29.1%, 50 basis points worse than the prior-year quarter. Operating margin was 8.7%, 80 basis points worse than the prior-year quarter. Net margin was 6.7%, 20 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $539.8 million. On the bottom line, the average EPS estimate is $0.64.
Next year's average estimate for revenue is $2.19 billion. The average EPS estimate is $2.66.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 312 members out of 321 rating the stock outperform, and nine members rating it underperform. Among 116 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 113 give Covance 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 Covance is outperform, with an average price target of $48.46.
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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.