The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Convergys met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share shrank significantly.
Margins contracted across the board.
Convergys recorded revenue of $508.8 million. The seven analysts polled by S&P Capital IQ anticipated a top line of $511.0 million on the same basis. GAAP reported sales were 14% lower than the prior-year quarter's $588.9 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 $0.25. The eight earnings estimates compiled by S&P Capital IQ forecast $0.24 per share. GAAP EPS of $0.29 for Q4 were 36% lower than the prior-year quarter's $0.45 per share. (The prior-year quarter included $0.05 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 35.2%, 190 basis points worse than the prior-year quarter. Operating margin was 6.6%, 180 basis points worse than the prior-year quarter. Net margin was 6.3%, 300 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $511.0 million. On the bottom line, the average EPS estimate is $0.24.
Next year's average estimate for revenue is $2.08 billion. The average EPS estimate is $1.02.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 97 members out of 117 rating the stock outperform, and 20 members rating it underperform. Among 27 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 23 give Convergys 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 Convergys is hold, with an average price target of $17.64.
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