The 10-second takeaway
For the quarter ended June 30 (Q2), Federal Signal missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue was unchanged and GAAP earnings per share dropped to a loss.
Gross margins contracted, operating margins increased, net margins shrank.
Federal Signal reported revenue of $204.4 million. The two analysts polled by S&P Capital IQ predicted revenue of $210.9 million on the same basis.
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 $0.15. The three earnings estimates compiled by S&P Capital IQ forecast $0.11 per share. GAAP EPS were -$0.27 for Q2 compared to $0.09 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 24.1%, 120 basis points worse than the prior-year quarter. Operating margin was 7.7%, 330 basis points better than the prior-year quarter. Net margin was -8.1%, 1,100 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $186.8 million. On the bottom line, the average EPS estimate is $0.07.
Next year's average estimate for revenue is $847.9 million. The average EPS estimate is $0.33.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 67 members out of 80 rating the stock outperform, and 13 members rating it underperform. Among 19 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 17 give Federal Signal a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Federal Signal is hold, with an average price target of $5.50.
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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. The Motley Fool has no positions in the stocks mentioned above. 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.