Olin Beats Expectations but Takes a Step Back Anyway

Seth Jayson, The Motley Fool
Updated

Olin (NYS: OLN) reported earnings on Jan. 30. Here are the numbers you need to know.

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

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

Margins increased across the board.

Revenue details
Olin booked revenue of $445.8 million. The eight analysts polled by S&P Capital IQ anticipated sales of $417.9 million. Sales were 16% higher than the prior-year quarter's $385.4 million.

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

EPS details
Non-GAAP EPS came in at $0.25. The nine earnings estimates compiled by S&P Capital IQ averaged $0.22 per share on the same basis. GAAP EPS of $0.23 for Q4 were much higher than the prior-year quarter's $0.02 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 17.4%, 130 basis points better than the prior-year quarter. Operating margin was 9.2%, 190 basis points better than the prior-year quarter. Net margin was 4.2%, 370 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $485.1 million. On the bottom line, the average EPS estimate is $0.45.

Next year's average estimate for revenue is $2.01 billion. The average EPS estimate is $1.93.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 552 members out of 568 rating the stock outperform, and 16 members rating it underperform. Among 138 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 137 give Olin a green thumbs-up, and one gives it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Olin is hold, with an average price target of $23.89.

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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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