The 10-second takeaway
For the quarter ended Sep. 30 (Q3), CEC Entertainment met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue dropped slightly and GAAP earnings per share dropped significantly.
Gross margins expanded, operating margins contracted, net margins contracted.
CEC Entertainment logged revenue of $196.6 million. The three analysts polled by S&P Capital IQ looked for a top line of $197.6 million on the same basis. GAAP reported sales were 1.7% lower than the prior-year quarter's $200.0 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 $0.48. The four earnings estimates compiled by S&P Capital IQ anticipated $0.50 per share. GAAP EPS of $0.45 for Q3 were 27% lower than the prior-year quarter's $0.62 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 46.6%, 350 basis points better than the prior-year quarter. Operating margin was 7.8%, 310 basis points worse than the prior-year quarter. Net margin was 4.0%, 180 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $177.1 million. On the bottom line, the average EPS estimate is $0.11.
Next year's average estimate for revenue is $803.9 million. The average EPS estimate is $2.78.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 70 members out of 91 rating the stock outperform, and 21 members rating it underperform. Among 41 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 30 give CEC Entertainment a green thumbs-up, and 11 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on CEC Entertainment is hold, with an average price target of $33.00.
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