The 10-second takeaway
For the quarter ended March 31 (Q1), Convergys met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped slightly. Non-GAAP earnings per share grew significantly. GAAP earnings per share didn't move.
Gross margins dropped, operating margins grew, net margins dropped.
Convergys logged revenue of $493.5 million. The seven analysts polled by S&P Capital IQ looked for revenue of $499.8 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 came in at $0.27. The eight earnings estimates compiled by S&P Capital IQ anticipated $0.23 per share. Non-GAAP EPS of $0.27 for Q1 were 23% higher than the prior-year quarter's $0.22 per share. (The prior-year quarter included $0.04 per share in earnings from discontinued operations.) GAAP EPS of $0.22 were the same as the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 35.5%, 60 basis points worse than the prior-year quarter. Operating margin was 7.4%, 160 basis points better than the prior-year quarter. Net margin was 5.1%, 10 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $501.3 million. On the bottom line, the average EPS estimate is $0.25.
Next year's average estimate for revenue is $2.05 billion. The average EPS estimate is $1.07.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 96 members out of 116 rating the stock outperform, and 20 members rating it underperform. Among 26 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 23 give Convergys a green thumbs-up, and three 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 $17.58.
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