The 10-second takeaway
For the quarter ended March 31 (Q3), Towers Watson met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved and GAAP earnings per share increased.
Margins dropped across the board.
Towers Watson logged revenue of $901.5 million. The nine analysts polled by S&P Capital IQ expected revenue of $896.8 million on the same basis. GAAP reported sales were 4.1% higher than the prior-year quarter's $866.1 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 $1.39. The six earnings estimates compiled by S&P Capital IQ forecast $1.35 per share. GAAP EPS of $0.95 for Q3 were 1.1% higher than the prior-year quarter's $0.94 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 31.9%, 40 basis points worse than the prior-year quarter. Operating margin was 14.5%, 210 basis points worse than the prior-year quarter. Net margin was 7.6%, 40 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $872.7 million. On the bottom line, the average EPS estimate is $1.24.
Next year's average estimate for revenue is $3.46 billion. The average EPS estimate is $5.13.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 170 members out of 182 rating the stock outperform, and 12 members rating it underperform. Among 51 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 50 give Towers Watson a green thumbs-up, and one give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Towers Watson is outperform, with an average price target of $73.49.
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