Farmer Brothers Increases Sales but Misses Estimates on Earnings

Just the facts, Fool.

Seth Jayson
Seth Jayson
Feb 7, 2013 at 12:00AM
Other

Farmer Brothers (Nasdaq: FARM) reported earnings on Feb. 6. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Farmer Brothers beat expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue grew slightly and GAAP loss per share increased.

Gross margins grew, operating margins grew, net margins shrank.

Revenue details
Farmer Brothers reported revenue of $135.7 million. The three analysts polled by S&P Capital IQ predicted revenue of $131.9 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

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 -$0.47. The two earnings estimates compiled by S&P Capital IQ anticipated $0.20 per share. GAAP EPS were -$0.47 for Q2 compared to -$0.27 per share for the prior-year quarter.

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 37.1%, 330 basis points better than the prior-year quarter. Operating margin was 0.3%, 460 basis points better than the prior-year quarter. Net margin was -5.4%, 230 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $123.4 million. On the bottom line, the average EPS estimate is $0.07.

Next year's average estimate for revenue is $499.4 million. The average EPS estimate is $0.55.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 31 members out of 44 rating the stock outperform, and 13 members rating it underperform. Among 12 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), seven give Farmer Brothers a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Farmer Brothers is buy, with an average price target of $16.00.

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