The 10-second takeaway
For the quarter ended June 30 (Q3), Headwaters met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue expanded. Non-GAAP earnings per share increased significantly. GAAP earnings per share grew.
Gross margins contracted, operating margins grew, net margins expanded.
Headwaters booked revenue of $197.0 million. The four analysts polled by S&P Capital IQ predicted a top line of $198.8 million on the same basis. GAAP reported sales were 12% higher than the prior-year quarter's $175.6 million.
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 $0.13. The four earnings estimates compiled by S&P Capital IQ predicted $0.18 per share. Non-GAAP EPS of $0.13 for Q3 were 225% higher than the prior-year quarter's $0.04 per share. (The prior-year quarter included -$0.25 per share in earnings from discontinued operations.) GAAP EPS were $0.15 for Q3 versus -$0.22 per share for 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 29.7%, 10 basis points worse than the prior-year quarter. Operating margin was 11.8%, 270 basis points better than the prior-year quarter. Net margin was 5.6%, much better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $218.8 million. On the bottom line, the average EPS estimate is $0.23.
Next year's average estimate for revenue is $708.1 million. The average EPS estimate is $0.22.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 734 members out of 804 rating the stock outperform, and 70 members rating it underperform. Among 177 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 162 give Headwaters a green thumbs-up, and 15 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Headwaters is buy, with an average price target of $13.63.
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