The 10-second takeaway
For the quarter ended April 30 (Q2), AEP Industries beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share grew.
Margins increased across the board.
AEP Industries logged revenue of $296.7 million. The one analyst polled by S&P Capital IQ looked for revenue of $272.2 million on the same basis. GAAP reported sales were 19% higher than the prior-year quarter's $248.5 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 $0.87. The one earnings estimate compiled by S&P Capital IQ averaged $0.39 per share. GAAP EPS were $0.87 for Q2 compared to -$0.11 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 14.5%, 250 basis points better than the prior-year quarter. Operating margin was 4.3%, 260 basis points better than the prior-year quarter. Net margin was 1.6%, 190 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $283.3 million. On the bottom line, the average EPS estimate is $0.24.
Next year's average estimate for revenue is $1.11 billion. The average EPS estimate is $1.12.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 74 members out of 91 rating the stock outperform, and 17 members rating it underperform. Among 28 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 23 give AEP Industries a green thumbs-up, and five give it a red thumbs-down.
Over the decades, small-cap stocks like AEP Industries have produced market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: 2 Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add AEP Industries to My Watchlist.
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.