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USA Mobility Misses Where it Counts

By Seth Jayson - Updated Apr 7, 2017 at 11:59AM

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Just the facts, Fool.

USA Mobility (Nasdaq: USMO) reported earnings on Nov. 1. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), USA Mobility beat slightly on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue contracted and GAAP earnings per share shrank significantly.

Gross margins grew, operating margins dropped, net margins dropped.

Revenue details
USA Mobility reported revenue of $55.1 million. The one analyst polled by S&P Capital IQ expected a top line of $54.3 million on the same basis. GAAP reported sales were 10% lower than the prior-year quarter's $61.5 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.36. The one earnings estimate compiled by S&P Capital IQ predicted $0.38 per share. GAAP EPS of $0.36 for Q3 were 22% lower than the prior-year quarter's $0.46 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 65.8%, 20 basis points better than the prior-year quarter. Operating margin was 23.7%, 270 basis points worse than the prior-year quarter. Net margin was 14.6%, 240 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $53.7 million. On the bottom line, the average EPS estimate is $0.37.

Next year's average estimate for revenue is $220.6 million. The average EPS estimate is $1.50.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 218 members out of 243 rating the stock outperform, and 25 members rating it underperform. Among 50 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 40 give USA Mobility a green thumbs-up, and 10 give it a red thumbs-down.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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