The 10-second takeaway
For the quarter ended March 31 (Q2), Sappi beat slightly on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped. GAAP earnings per share dropped significantly.
Margins shrank across the board.
Sappi logged revenue of $1.50 billion. The four analysts polled by S&P Capital IQ predicted revenue of $1.48 billion on the same basis. GAAP reported sales were 8.0% lower than the prior-year quarter's $1.63 billion.
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 $0.01. The two earnings estimates compiled by S&P Capital IQ predicted $0.01 per share. GAAP EPS of $0.01 for Q2 were 91% lower than the prior-year quarter's $0.11 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 9.0%, 520 basis points worse than the prior-year quarter. Operating margin was 2.3%, 540 basis points worse than the prior-year quarter. Net margin was 0.5%, 310 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $1.46 billion. On the bottom line, the average EPS estimate is -$0.03.
Next year's average estimate for revenue is $6.12 billion. The average EPS estimate is $0.02.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 54 members out of 62 rating the stock outperform, and eight members rating it underperform. Among 22 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 21 give Sappi a green thumbs-up, and one give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Sappi is underperform, with an average price target of $3.55.
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