The 10-second takeaway
For the quarter ended June 30 (Q2), Mercer International missed estimates on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly and GAAP earnings per share contracted significantly.
Margins dropped across the board.
Mercer International booked revenue of $258.7 million. The three analysts polled by S&P Capital IQ hoped for revenue of $272.7 million on the same basis. GAAP reported sales were 23% lower than the prior-year quarter's $335.7 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 $0.01. The five earnings estimates compiled by S&P Capital IQ predicted $0.04 per share. GAAP EPS of $0.03 for Q2 were 92% lower than the prior-year quarter's $0.38 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 20.3%, 510 basis points worse than the prior-year quarter. Operating margin was 9.0%, 670 basis points worse than the prior-year quarter. Net margin was 0.7%, 550 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $258.7 million. On the bottom line, the average EPS estimate is $0.04.
Next year's average estimate for revenue is $1.05 billion. The average EPS estimate is $0.33.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 157 members out of 171 rating the stock outperform, and 14 members rating it underperform. Among 35 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 34 give Mercer International a green thumbs-up, and one gives it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Mercer International is hold, with an average price target of $7.48.
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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.