The Gory Details on WMS Industries' Double Fumble

WMS Industries (NYS: WMS) reported earnings on Jan. 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q2), WMS Industries missed on revenues and missed expectations on earnings per share.

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

Gross margins grew, operating margins dropped, and net margins dropped.

Revenue details
WMS Industries recorded revenue of $162.2 million. The 12 analysts polled by S&P Capital IQ wanted to see a top line of $170.8 million. Sales were 19% lower than the prior-year quarter's $199.9 million.


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

EPS details
Non-GAAP EPS came in at $0.27. The 15 earnings estimates compiled by S&P Capital IQ averaged $0.30 per share on the same basis. GAAP EPS of $0.29 for Q2 were 37% lower than the prior-year quarter's $0.46 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 61.1%, 50 basis points better than the prior-year quarter. Operating margin was 12.9%, 550 basis points worse than the prior-year quarter. Net margin was 9.9%, 360 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $190.5 million. On the bottom line, the average EPS estimate is $0.43.

Next year's average estimate for revenue is $706.2 million. The average EPS estimate is $1.43.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 179 members out of 206 rating the stock outperform, and 27 members rating it underperform. Among 54 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 49 give WMS Industries a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on WMS Industries is hold, with an average price target of $23.07.

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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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