Griffon Beats Estimates but Has a Big Earnings Drop

Seth Jayson, The Motley Fool
Updated

Griffon (NYS: GFF) reported earnings on Jan. 31. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q1), Griffon met expectations on revenue and beat expectations on earnings per share.

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

Margins grew across the board.

Revenue details
Griffon notched revenue of $451.0 million. The two analysts polled by S&P Capital IQ wanted to see a top line of $454.8 million. Sales were 8.8% higher than the prior-year quarter's $414.4 million.

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

EPS details
Non-GAAP EPS came in at $0.07. The two earnings estimates compiled by S&P Capital IQ predicted $0.05 per share on the same basis. GAAP EPS were $0.04 for Q1 compared to -$0.03 per share for the prior-year quarter.

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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 22.8%, 160 basis points better than the prior-year quarter. Operating margin was 4.4%, 260 basis points better than the prior-year quarter. Net margin was 0.6%, 100 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $510.1 million. On the bottom line, the average EPS estimate is $0.10.

Next year's average estimate for revenue is $1.94 billion. The average EPS estimate is $0.41.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 48 members out of 63 rating the stock outperform, and 15 members rating it underperform. Among 19 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 15 give Griffon a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Griffon is buy, with an average price target of $12.00.

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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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