The 10-second takeaway
For the quarter ended June 30 (Q1), Precision Castparts missed estimates on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share grew significantly. GAAP earnings per share increased significantly.
Margins grew across the board.
Precision Castparts reported revenue of $2.37 billion. The 18 analysts polled by S&P Capital IQ expected revenue of $2.52 billion on the same basis. GAAP reported sales were 20% higher than the prior-year quarter's $1.97 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 $2.88. The 23 earnings estimates compiled by S&P Capital IQ predicted $2.90 per share. Non-GAAP EPS of $2.88 for Q1 were 23% higher than the prior-year quarter's $2.35 per share. (The prior-year quarter included -$0.01 per share in earnings from discontinued operations.) GAAP EPS of $2.96 for Q1 were 27% higher than the prior-year quarter's $2.33 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 33.7%, 140 basis points better than the prior-year quarter. Operating margin was 27.2%, 100 basis points better than the prior-year quarter. Net margin was 18.4%, 100 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $2.49 billion. On the bottom line, the average EPS estimate is $2.88.
Next year's average estimate for revenue is $10.35 billion. The average EPS estimate is $12.27.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,290 members out of 1,323 rating the stock outperform, and 33 members rating it underperform. Among 397 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 392 give Precision Castparts a green thumbs-up, and five give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Precision Castparts is outperform, with an average price target of $240.09.
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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 Precision Castparts. 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.