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.
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