Compass Diversified Holdings Increases Sales but Misses Earnings Estimates

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Compass Diversified Holdings (NYS: CODI) reported earnings on May 9. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Compass Diversified Holdings beat expectations on revenue and missed expectations on earnings per share.

Compared to the prior-year quarter, both revenue and GAAP loss per share dropped.


Margins expanded across the board.

Revenue details
Compass Diversified Holdings notched revenue of $232.4 million. The four analysts polled by S&P Capital IQ foresaw revenue of $221.7 million on the same basis. GAAP-reported sales were 31% higher than the prior-year quarter's $177.3 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 -$0.02. The three earnings estimates compiled by S&P Capital IQ averaged $0.08 per share. GAAP EPS were -$0.02 for Q1 compared to -$0.15 per share for the prior-year quarter.

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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 33.6%, 200 basis points better than the prior-year quarter. Operating margin was 6.9%, 60 basis points better than the prior-year quarter. Net margin was -0.3%, 360 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $233 million. On the bottom line, the average EPS estimate is $0.14.

Next year's average estimate for revenue is $902.8 million. The average EPS estimate is $1.12.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 310 members rating the stock outperform and six members rating it underperform. Among 81 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 81 give Compass Diversified Holdings a green thumbs-up, and give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Compass Diversified Holdings is buy, with an average price target of $16.25.

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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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