The 10-second takeaway
For the quarter ended April 30 (Q3), KMG Chemicals beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank. GAAP earnings per share shrank significantly.
Margins shrank across the board.
KMG Chemicals chalked up revenue of $59.9 million. The one analyst polled by S&P Capital IQ predicted revenue of $57.6 million on the same basis. GAAP reported sales were 10.0% lower than the prior-year quarter's $66.6 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 $0.25. The one earnings estimate compiled by S&P Capital IQ forecast $0.22 per share. GAAP EPS of $0.25 for Q3 were 26% lower than the prior-year quarter's $0.34 per share. (The prior-year quarter included $0.01 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 27.3%, 360 basis points worse than the prior-year quarter. Operating margin was 7.3%, 300 basis points worse than the prior-year quarter. Net margin was 4.8%, 120 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $74.0 million. On the bottom line, the average EPS estimate is $0.26.
Next year's average estimate for revenue is $256.2 million. The average EPS estimate is $1.03.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 288 members out of 307 rating the stock outperform, and 19 members rating it underperform. Among 57 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 51 give KMG Chemicals a green thumbs-up, and six give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on KMG Chemicals is outperform, with an average price target of $22.00.
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