The 10-second takeaway
For the quarter ended March 31 (Q2), Sappi met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted and GAAP earnings per share improved.
Margins grew across the board.
Sappi Limited notched revenue of $1.63 billion. The two analysts polled by S&P Capital IQ anticipated revenue of $1.62 billion on the same basis. GAAP reported sales were 10% lower than the prior-year quarter's $1.82 billion.
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 $0.11. The two earnings estimates compiled by S&P Capital IQ averaged $0.08 per share. GAAP EPS were $0.11 for Q2 versus -$0.14 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 14.2%, 150 basis points better than the prior-year quarter. Operating margin was 7.7%, 40 basis points better than the prior-year quarter. Net margin was 3.6%, 770 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1.56 billion. On the bottom line, the average EPS estimate is $0.05.
Next year's average estimate for revenue is $6.66 billion. The average EPS estimate is $0.31.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 58 members out of 68 rating the stock outperform, and 10 members rating it underperform. Among 19 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 16 give Sappi 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 Sappi is hold, with an average price target of $3.52.
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