The 10-second takeaway
For the quarter ended June 30 (Q2), Federated Investors missed estimates on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue shrank. GAAP earnings per share stayed the same.
Gross margins contracted, operating margins dropped, net margins expanded.
Federated Investors notched revenue of $223.8 million. The six analysts polled by S&P Capital IQ wanted to see a top line of $232.5 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 $0.39. The 12 earnings estimates compiled by S&P Capital IQ predicted $0.40 per share. GAAP EPS of $0.39 were the same as the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 69.7%, 220 basis points worse than the prior-year quarter. Operating margin was 29.5%, 20 basis points worse than the prior-year quarter. Net margin was 18.1%, 70 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $241.8 million. On the bottom line, the average EPS estimate is $0.43.
Next year's average estimate for revenue is $977.3 million. The average EPS estimate is $1.69.
The stock has a four-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 110 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 106 give Federated Investors a green thumbs-up, and four give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Federated Investors is underperform, with an average price target of $23.77.
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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 Federated Investors. 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.