Matthews International Outruns Estimates Again

Matthews International (NAS: MATW) reported earnings on Jan. 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q1), Matthews International beat expectations on revenues and earnings per share.

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

Gross margins improved, operating margins shrank, and net margins shrank.

Revenue details
Matthews International logged revenue of $217.2 million. The three analysts polled by S&P Capital IQ hoped for a top line of $209.7 million. Sales were 4.8% higher than the prior-year quarter's $207.3 million.


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

EPS details
Non-GAAP EPS came in at $0.47. The three earnings estimates compiled by S&P Capital IQ predicted $0.37 per share on the same basis. GAAP EPS of $0.40 for Q1 were 11% lower than the prior-year quarter's $0.45 per share.


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 100%, 6,150 basis points better than the prior-year quarter. Operating margin was 8.7%, 190 basis points worse than the prior-year quarter. Net margin was 5.2%, 120 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $229.6 million. On the bottom line, the average EPS estimate is $0.64.

Next year's average estimate for revenue is $922.2 million. The average EPS estimate is $2.60.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 84 members out of 84 rating the stock outperform. Among 35 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 35 give Matthews International a green thumbs-up.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Matthews International is buy, with an average price target of $43.

Over the decades, small-cap stocks like Matthews International have produced market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: 2 Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.

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.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

From Our Partners