The 10-second takeaway
For the quarter ended Dec. 31 (Q1), Rock-Tenn met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded slightly and GAAP earnings per share grew.
Margins grew across the board.
Rock-Tenn reported revenue of $2.29 billion. The eight analysts polled by S&P Capital IQ looked for revenue of $2.30 billion on the same basis. GAAP reported sales were 0.9% higher than the prior-year quarter's $2.27 billion.
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 $1.35. The 13 earnings estimates compiled by S&P Capital IQ predicted $1.27 per share. GAAP EPS of $1.18 for Q1 were 11% higher than the prior-year quarter's $1.06 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 17.9%, 60 basis points better than the prior-year quarter. Operating margin was 8.2%, 80 basis points better than the prior-year quarter. Net margin was 3.8%, 40 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $2.36 billion. On the bottom line, the average EPS estimate is $1.19.
Next year's average estimate for revenue is $9.58 billion. The average EPS estimate is $5.97.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 185 members out of 197 rating the stock outperform, and 12 members rating it underperform. Among 56 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 52 give Rock-Tenn a green thumbs-up, and four give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Rock-Tenn is outperform, with an average price target of $78.50.
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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 owns shares of Rock-Tenn Company. 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.