Oil-Dri of America Whiffs on Earnings

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Oil-Dri of America (NYS: ODC) reported earnings on Dec. 8. Here's what you need to know.

The 10-second takeaway
For the quarter ended Oct. 31 (Q1), Oil-Dri of America beat expectations on revenues and whiffed on EPS. Gross margins widened, operating margins contracted, and net margins shrank.

Revenue
Oil-Dri of America recorded revenue of $60 million. The one analyst polled by S&P Capital IQ hoped for revenue of $57 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS
EPS came in at $0.15. The one earning estimate compiled by S&P Capital IQ forecast $0.37 per share. GAAP EPS of $0.15 for Q1 were 57% lower than the prior-year quarter's $0.35 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margins
For the quarter, gross margin was 23.8%, 30 basis points better than the prior-year quarter. Operating margin was 3%, 380 basis points worse than the prior-year quarter. Net margin was 1.8%, 270 basis points worse than the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods.

Looking ahead
What does the future hold?

Next quarter's average estimate for revenue is $59 million. On the bottom line, the average EPS estimate is $0.26. (There is one revenue estimate and one EPS estimate.)

For the full year ending 2011, the average estimate for revenue is $224 million. The average EPS estimate is $1.06. (There is one revenue estimate and one EPS estimate.)

Investor sentiment
The stock has a four-star rating out of five at Motley Fool CAPS, with 150 members out of 160 rating the stock outperform and 10 members rating it underperform. Among 54 CAPS All-Star picks, 52 give Oil-Dri of America a green thumbs-up, and two give it a red thumbs-down.

At the time this article was published 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 ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. 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.

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