Neenah Paper Crushes Earnings Estimates

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

The 10-second takeaway
For the quarter ended March 31 (Q1), Neenah Paper missed estimates on revenues and crushed expectations on earnings per share.

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


Margins increased across the board.

Revenue details
Neenah Paper booked revenue of $198.2 million. The one analyst polled by S&P Capital IQ expected revenue of $206.0 million on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $172.7 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
EPS came in at $0.77. The three earnings estimates compiled by S&P Capital IQ predicted $0.62 per share. GAAP EPS of $0.54 for Q1 were 23% higher than the prior-year quarter's $0.44 per share. (The prior-year quarter included -$0.01 per share in earnings from discontinued operations.)

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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 21.1%, 190 basis points better than the prior-year quarter. Operating margin was 11.2%, 120 basis points better than the prior-year quarter. Net margin was 4.5%, 50 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $223 million. On the bottom line, the average EPS estimate is $0.70.

Next year's average estimate for revenue is $787.6 million. The average EPS estimate is $2.46.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 113 members rating the stock outperform and 15 members rating it underperform. Among 44 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 42 give Neenah Paper 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 Neenah Paper is outperform, with an average price target of $35.00.

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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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