The 10-second takeaway
For the quarter ended March 31 (Q1), Quad/Graphics beat slightly on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share dropped significantly. GAAP earnings per share dropped to a loss.
Margins contracted across the board.
Quad/Graphics recorded revenue of $1.13 billion. The two analysts polled by S&P Capital IQ expected to see sales of $1.12 billion on the same basis. GAAP reported sales were 14% higher than the prior-year quarter's $989.6 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 $0.05. The two earnings estimates compiled by S&P Capital IQ anticipated $0.15 per share. Non-GAAP EPS of $0.05 for Q1 were 96% lower than the prior-year quarter's $1.14 per share. (The prior-year quarter included $0.68 per share in earnings from discontinued operations.) GAAP EPS were -$0.31 for Q1 compared to $1.01 per share for 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 19.5%, 240 basis points worse than the prior-year quarter. Operating margin was 2.2%, 190 basis points worse than the prior-year quarter. Net margin was -1.2%, 600 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $1.09 billion. On the bottom line, the average EPS estimate is -$0.02.
Next year's average estimate for revenue is $4.90 billion. The average EPS estimate is $2.06.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 16 members out of 34 rating the stock outperform, and 18 members rating it underperform. Among 12 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), five give Quad/Graphics a green thumbs-up, and seven give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Quad/Graphics is outperform, with an average price target of $24.50.
Looking for alternatives to Quad/Graphics? 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 Quad/Graphics 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.