McGraw Hill Financial
The 10-second takeaway
For the quarter ended June 30 (Q2), McGraw Hill Financial beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly. Non-GAAP earnings per share increased. GAAP earnings per share increased significantly.
Gross margins contracted, operating margins expanded, net margins expanded.
McGraw Hill Financial logged revenue of $1.25 billion. The eight analysts polled by S&P Capital IQ hoped for revenue of $1.19 billion on the same basis. GAAP reported sales were 19% lower than the prior-year quarter's $1.55 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 $0.92. The eight earnings estimates compiled by S&P Capital IQ predicted $0.82 per share. Non-GAAP EPS of $0.92 for Q2 were 8.2% higher than the prior-year quarter's $0.85 per share. GAAP EPS of $0.91 for Q2 were 20% higher than the prior-year quarter's $0.76 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 34.9%, much worse than the prior-year quarter. Operating margin was 34.9%, 860 basis points better than the prior-year quarter. Net margin was 20.3%, 630 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $1.18 billion. On the bottom line, the average EPS estimate is $0.79.
Next year's average estimate for revenue is $4.81 billion. The average EPS estimate is $3.22.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 472 members out of 516 rating the stock outperform, and 44 members rating it underperform. Among 221 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 202 give McGraw Hill Financial a green thumbs-up, and 19 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on McGraw Hill Financial is outperform, with an average price target of $61.57.
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