The 10-second takeaway
For the quarter ended March 31 (Q1), CEC Entertainment beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew. GAAP earnings per share expanded.
Gross margins increased, operating margins dropped, net margins contracted.
CEC Entertainment booked revenue of $255.3 million. The three analysts polled by S&P Capital IQ looked for net sales of $246.9 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 came in at $1.90. The four earnings estimates compiled by S&P Capital IQ predicted $1.81 per share. GAAP EPS of $1.90 for Q1 were 5.0% higher than the prior-year quarter's $1.81 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 43.4%, 750 basis points better than the prior-year quarter. Operating margin was 22.0%, 30 basis points worse than the prior-year quarter. Net margin was 13.0%, 10 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $186.6 million. On the bottom line, the average EPS estimate is $0.28.
Next year's average estimate for revenue is $823.2 million. The average EPS estimate is $2.69.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 71 members out of 91 rating the stock outperform, and 20 members rating it underperform. Among 38 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 29 give CEC Entertainment a green thumbs-up, and nine give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on CEC Entertainment is hold, with an average price target of $35.00.
Can your portfolio provide you with enough income to last through retirement? You'll need more than CEC Entertainment. Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks." Click here for instant access to this free report.
- Add CEC Entertainment 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.