The Gory Details of American Railcar Industries' Earnings Miss

Before you go, we thought you'd like these...
Before you go close icon

American Railcar Industries (NAS: ARII) filed its 10-K on Mar. 2. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), American Railcar Industries missed estimates on revenues and whiffed on earnings per share.

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

Margins expanded across the board.

Revenue details
American Railcar Industries reported revenue of $196.8 million. The three analysts polled by S&P Capital IQ predicted revenue of $207.7 million on the same basis. GAAP reported sales were much higher than the prior-year quarter's $95.3 million.

anImage

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 $0.24. The six earnings estimates compiled by S&P Capital IQ anticipated $0.27 per share on the same basis. GAAP EPS were $0.23 for Q4 compared to -$0.37 per share for the prior-year quarter.

anImage

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 12.5%, 920 basis points better than the prior-year quarter. Operating margin was 7.4%, 1,220 basis points better than the prior-year quarter. Net margin was 2.6%, 1,080 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $185.0 million. On the bottom line, the average EPS estimate is $0.31.

Next year's average estimate for revenue is $785.5 million. The average EPS estimate is $1.54.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 221 members out of 256 rating the stock outperform, and 35 members rating it underperform. Among 82 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 76 give American Railcar Industries 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 American Railcar Industries is outperform, with an average price target of $29.

Over the decades, small-cap stocks like American Railcar Industries have produced 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: 2 Small Caps the Government Won't Let Go Broke." Click here for 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 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.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners