Solutia Catches Analysts Sleeping Again

Solutia (NYS: SOA) reported earnings on Jan. 27. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Solutia beat expectations on revenues and beat expectations on earnings per share.

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

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

Revenue details
Solutia booked revenue of $526 million. The six analysts polled by S&P Capital IQ wanted to see sales of $508.4 million. Sales were 7.6% higher than the prior-year quarter's $489 million.


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

EPS details
Non-GAAP EPS came in at $0.49. The eight earnings estimates compiled by S&P Capital IQ predicted $0.47 per share on the same basis. GAAP EPS of $0.62 for Q4 were 15% higher than the prior-year quarter's $0.39 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 29.1%, 60 basis points worse than the prior-year quarter. Operating margin was 16%, 40 basis points worse than the prior-year quarter. Net margin was 10.3%, 70 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $542 million. On the bottom line, the average EPS estimate is $0.52.

Next year's average estimate for revenue is $2.23 billion. The average EPS estimate is $2.19.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 97 members out of 110 rating the stock outperform, and 13 members rating it underperform. Among 42 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 40 give Solutia a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Solutia is outperform, with an average price target of $22.75.

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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