Twin Disc Increases Sales but Misses Revenue Estimates

Seth Jayson, The Motley Fool
Updated

Twin Disc (NAS: TWIN) reported earnings on Jan. 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 30 (Q2), Twin Disc missed on revenues and whiffed on earnings per share.

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

Margins grew across the board.

Revenue details
Twin Disc tallied revenue of $83 million. The three analysts polled by S&P Capital IQ hoped for sales of $89 million. Sales were 10% higher than the prior-year quarter's $75 million.

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

EPS details
EPS came in at $0.51. The three earnings estimates compiled by S&P Capital IQ averaged $0.60 per share. GAAP EPS of $0.51 for Q2 were 46% higher than the prior-year quarter's $0.35 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 35.6%, 400 basis points better than the prior-year quarter. Operating margin was 11.4%, 460 basis points better than the prior-year quarter. Net margin was 7.1%, 170 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $91 million. On the bottom line, the average EPS estimate is $0.66.

Next year's average estimate for revenue is $373 million. The average EPS estimate is $2.93.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 314 members out of 321 rating the stock outperform, and seven members rating it underperform. Among 106 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 103 give Twin Disc a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Twin Disc is buy, with an average price target of $46.

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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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