The Gory Details of MTS Systems' Earnings Miss

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MTS Systems (NAS: MTSC) reported earnings on May 3. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q2), MTS Systems missed estimates on revenues and whiffed on earnings per share.

Compared with the prior-year quarter, revenue grew and GAAP earnings per share shrank.


Gross margins increased, operating margins shrank, net margins shrank.

Revenue details
MTS Systems recorded revenue of $129.0 million. The three analysts polled by S&P Capital IQ anticipated net sales of $133.4 million on the same basis. GAAP reported sales were 14% higher than the prior-year quarter's $113.1 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 $0.69. The two earnings estimates compiled by S&P Capital IQ forecast $0.90 per share. GAAP EPS of $0.69 for Q2 were 8.0% lower than the prior-year quarter's $0.75 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 43.7%, 40 basis points better than the prior-year quarter. Operating margin was 13.3%, 250 basis points worse than the prior-year quarter. Net margin was 8.6%, 180 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $137.0 million. On the bottom line, the average EPS estimate is $0.93.

Next year's average estimate for revenue is $546.6 million. The average EPS estimate is $3.81.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 72 members out of 79 rating the stock outperform, and seven members rating it underperform. Among 23 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 21 give MTS Systems 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 MTS Systems is outperform, with an average price target of $58.67.

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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. He is the 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 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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