Alliance Data Systems Beats Up on Analysts Yet Again

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Alliance Data Systems (NYS: ADS) reported earnings on Feb. 2. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Alliance Data Systems met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded and GAAP earnings per share increased significantly.

Margins increased across the board.

Revenue details
Alliance Data Systems reported revenue of $847.6 million. The 20 analysts polled by S&P Capital IQ anticipated sales of $847.4 million. Sales were 12% higher than the prior-year quarter's $755.7 million.

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

EPS details
Non-GAAP EPS came in at $1.70. The 20 earnings estimates compiled by S&P Capital IQ forecast $1.50 per share on the same basis. GAAP EPS of $1.12 for Q4 were 32% higher than the prior-year quarter's $0.85 per share.

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

Margin details
For the quarter, gross margin was 25.9%, 240 basis points better than the prior-year quarter. Operating margin was 21.4%, 280 basis points better than the prior-year quarter. Net margin was 7.8%, 160 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $837.6 million. On the bottom line, the average EPS estimate is $2.20.

Next year's average estimate for revenue is $3.48 billion. The average EPS estimate is $8.27.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 191 members out of 226 rating the stock outperform, and 35 members rating it underperform. Among 77 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 71 give Alliance Data Systems a green thumbs-up, and six give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Alliance Data Systems is outperform, with an average price target of $109.27.

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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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