The 10-second takeaway
For the quarter ended June 30 (Q2), Deluxe met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded slightly. Non-GAAP earnings per share increased. GAAP earnings per share expanded.
Gross margins dropped, operating margins grew, net margins grew.
Deluxe notched revenue of $381.4 million. The three analysts polled by S&P Capital IQ wanted to see a top line of $379.2 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 $0.96. The three earnings estimates compiled by S&P Capital IQ forecast $0.88 per share. Non-GAAP EPS of $0.96 for Q2 were 13% higher than the prior-year quarter's $0.85 per share. GAAP EPS of $0.94 for Q2 were 15% higher than the prior-year quarter's $0.82 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 65.0%, 60 basis points worse than the prior-year quarter. Operating margin was 21.9%, 150 basis points better than the prior-year quarter. Net margin was 12.6%, 120 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $389.6 million. On the bottom line, the average EPS estimate is $0.93.
Next year's average estimate for revenue is $1.56 billion. The average EPS estimate is $3.68.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 206 members out of 228 rating the stock outperform, and 22 members rating it underperform. Among 78 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 71 give Deluxe 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 Deluxe is outperform, with an average price target of $46.00.
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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 recommends Deluxe. 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.