GrafTech International Outruns Estimates Again

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GrafTech International (NYS: GTI) reported earnings on Feb. 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), GrafTech International beat expectations on revenues and crushed expectations on earnings per share.

Compared with the prior-year quarter, revenue improved significantly and GAAP earnings per share contracted significantly.

Margins dropped across the board.

Revenue details
GrafTech International logged revenue of $345.8 million. The four analysts polled by S&P Capital IQ expected to see a top line of $334.0 million on the same basis. GAAP reported sales were 24% higher than the prior-year quarter's $281.2 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.31. The five earnings estimates compiled by S&P Capital IQ averaged $0.24 per share on the same basis. GAAP EPS of $0.39 for Q3 were 34% lower than the prior-year quarter's $0.59 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 24.1%, 130 basis points worse than the prior-year quarter. Operating margin was 9.0%, 440 basis points worse than the prior-year quarter. Net margin was 16.4%, 1,100 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $363.4 million. On the bottom line, the average EPS estimate is $0.30.

Next year's average estimate for revenue is $1.33 billion. The average EPS estimate is $0.95.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 865 members out of 882 rating the stock outperform, and 18 members rating it underperform. Among 221 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 219 give GrafTech International a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on GrafTech International is buy, with an average price target of $23.00.

Over the decades, small-cap stocks like GrafTech International have provided market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Get instant access to this free report.

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. He is the co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of GrafTech International. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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