Quality Systems Meets on Revenues, Misses on EPS

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Quality Systems (NAS: QSII) reported earnings on May 17. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q4), Quality Systems met expectations on revenues and missed estimates on earnings per share.

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


Margins dropped across the board.

Revenue details
Quality Systems booked revenue of $109.0 million. The 15 analysts polled by S&P Capital IQ hoped for a top line of $109.8 million on the same basis. GAAP reported sales were 12% higher than the prior-year quarter's $97.1 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 $0.25. The 21 earnings estimates compiled by S&P Capital IQ predicted $0.30 per share. GAAP EPS of $0.25 for Q4 were 22% lower than the prior-year quarter's $0.32 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 61.5%, 430 basis points worse than the prior-year quarter. Operating margin was 21.4%, 790 basis points worse than the prior-year quarter. Net margin was 13.8%, 530 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $121.4 million. On the bottom line, the average EPS estimate is $0.36.

Next year's average estimate for revenue is $516.7 million. The average EPS estimate is $1.56.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,108 members rating the stock outperform and 64 members rating it underperform. Among 738 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 722 give Quality Systems a green thumbs-up, and 16 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Quality Systems is hold, with an average price target of $46.38.

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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. Motley Fool newsletter services have recommended buying shares of Quality Systems. 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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