The Gory Details on Encore Wire's Double Fumble

Just the facts, Fool.

Seth Jayson
Seth Jayson
Feb 20, 2013 at 12:00AM
Other

Encore Wire (Nasdaq: WIRE) reported earnings on Feb. 20. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Encore Wire missed estimates on revenues and missed estimates on earnings per share.

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

Margins contracted across the board.

Revenue details
Encore Wire reported revenue of $258.0 million. The two analysts polled by S&P Capital IQ wanted to see revenue of $279.5 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 $0.25. The two earnings estimates compiled by S&P Capital IQ forecast $0.27 per share. GAAP EPS of $0.25 for Q4 were 64% lower than the prior-year quarter's $0.69 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 8.7%, 690 basis points worse than the prior-year quarter. Operating margin was 2.9%, 710 basis points worse than the prior-year quarter. Net margin was 2.0%, 460 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $293.8 million. On the bottom line, the average EPS estimate is $0.38.

Next year's average estimate for revenue is $1.16 billion. The average EPS estimate is $1.77.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 324 members out of 350 rating the stock outperform, and 26 members rating it underperform. Among 87 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 83 give Encore Wire 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 Encore Wire is outperform, with an average price target of $36.00.

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