The 10-second takeaway
For the quarter ended Jan. 31 (Q2), KMG Chemicals beat slightly on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue shrank significantly. GAAP earnings per share shrank significantly.
Gross margins expanded, operating margins dropped, net margins contracted.
KMG Chemicals recorded revenue of $57.0 million. The one analyst polled by S&P Capital IQ expected revenue of $56.0 million on the same basis. GAAP reported sales were 13% lower than the prior-year quarter's $65.2 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 $0.14. The one earnings estimate compiled by S&P Capital IQ anticipated $0.16 per share. GAAP EPS of $0.14 for Q2 were 36% lower than the prior-year quarter's $0.22 per share. (The prior-year quarter included -$0.03 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 27.6%, 210 basis points better than the prior-year quarter. Operating margin was 5.6%, 430 basis points worse than the prior-year quarter. Net margin was 2.8%, 100 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $59.6 million. On the bottom line, the average EPS estimate is $0.35.
Next year's average estimate for revenue is $255.5 million. The average EPS estimate is $1.23.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 291 members out of 311 rating the stock outperform, and 20 members rating it underperform. Among 61 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 56 give KMG Chemicals 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 KMG Chemicals is outperform, with an average price target of $22.00.
Looking for alternatives to KMG Chemicals? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.
- Add KMG Chemicals to My Watchlist.
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 has no position in any of the stocks mentioned. 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.