The Gory Details on IHS' Double Miss

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IHS (NYS: IHS) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Feb. 29 (Q1), IHS missed estimates on revenues and missed estimates on earnings per share.

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


Gross margins expanded, operating margins contracted, net margins dropped.

Revenue details
IHS logged revenue of $342.7 million. The 10 analysts polled by S&P Capital IQ anticipated revenue of $356.7 million on the same basis. GAAP reported sales were 16% higher than the prior-year quarter's $295.0 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 $0.77. The 10 earnings estimates compiled by S&P Capital IQ forecast $0.82 per share on the same basis. GAAP EPS of $0.35 for Q1 were 26% lower than the prior-year quarter's $0.47 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 57.2%, 70 basis points better than the prior-year quarter. Operating margin was 12.4%, 240 basis points worse than the prior-year quarter. Net margin was 6.8%, 360 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $383.9 million. On the bottom line, the average EPS estimate is $0.94.

Next year's average estimate for revenue is $1.54 billion. The average EPS estimate is $3.97.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 76 members out of 87 rating the stock outperform, and 11 members rating it underperform. Among 34 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 30 give IHS a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on IHS is outperform, with an average price target of $93.20.

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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