A. Schulman Crushes Estimates

Seth Jayson, The Motley Fool
Updated

A. Schulman (NAS: SHLM) reported earnings on Jan. 5. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Nov. 30 (Q1), A. Schulman whiffed on revenues and crushed expectations on earnings per share.

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

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

Revenue details
A. Schulman reported revenue of $517 million. The two analysts polled by S&P Capital IQ expected to see a top line of $582 million. Sales were 4.4% higher than the prior-year quarter's $495 million

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.52. The four earnings estimates compiled by S&P Capital IQ predicted $0.42 per share on the same basis. GAAP EPS of $0.46 for Q1 were 59% higher than the prior-year quarter's $0.29 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 13.4%, 60 basis points worse than the prior-year quarter. Operating margin was 4.3%, 80 basis points better than the prior-year quarter. Net margin was 2.6%, 70 basis points better than the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods.

Looking ahead
What does the future hold?

Next quarter's average estimate for revenue is $514 million. On the bottom line, the average EPS estimate is $0.43.

Next year's average estimate for revenue is $2.2 billion. The average EPS estimate is $2.11.

Investor Sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 70 members out of 79 rating the stock outperform, and 10 members rating it underperform. Among 25 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 25 give A. Schulman a green thumbs-up, and none give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on A. Schulman is outperform, with an average price target of $30.

At the time thisarticle 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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