The 10-second takeaway
For the quarter ended June 30 (Q2), Outerwall missed slightly on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded. Non-GAAP earnings per share expanded significantly. GAAP earnings per share expanded significantly.
Gross margins expanded, operating margins dropped, net margins expanded.
Outerwall reported revenue of $554.2 million. The 10 analysts polled by S&P Capital IQ predicted sales of $565.5 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 $1.91. The 10 earnings estimates compiled by S&P Capital IQ predicted $0.99 per share. Non-GAAP EPS of $1.91 for Q2 were 53% higher than the prior-year quarter's $1.25 per share. GAAP EPS of $1.64 for Q2 were 48% higher than the prior-year quarter's $1.11 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 33.8%, 80 basis points better than the prior-year quarter. Operating margin was 12.7%, 80 basis points worse than the prior-year quarter. Net margin was 8.5%, 160 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $617.9 million. On the bottom line, the average EPS estimate is $1.43.
Next year's average estimate for revenue is $2.40 billion. The average EPS estimate is $5.84.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 640 members out of 735 rating the stock outperform, and 95 members rating it underperform. Among 197 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 170 give Outerwall a green thumbs-up, and 27 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Outerwall is outperform, with an average price target of $68.50.
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