USG Increases Sales but Misses Estimates on Earnings

Seth Jayson, The Motley Fool
Updated

USG (NYS: USG) reported earnings on Feb. 6. Here are the numbers you need to know.

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

Compared to the prior-year quarter, revenue improved and GAAP loss per share shrank.

Gross margins dropped, operating margins increased, and net margins improved.

Revenue details
USG recorded revenue of $750.0 million. The 12 analysts polled by S&P Capital IQ hoped for a top line of $726.7 million. Sales were 7.8% higher than the prior-year quarter's $696.0 million.

anImage
anImage

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

EPS details
Non-GAAP EPS came in at -$0.90. The 14 earnings estimates compiled by S&P Capital IQ averaged -$0.74 per share on the same basis. GAAP EPS were -$0.95 for Q4 versus -$1.17 per share for the prior-year quarter.

anImage
anImage

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 5.7%, 60 basis points worse than the prior-year quarter. Operating margin was -4.9%, 70 basis points better than the prior-year quarter. Net margin was -13.3%, 410 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $773.9 million. On the bottom line, the average EPS estimate is -$0.62.

Next year's average estimate for revenue is $3.20 billion. The average EPS estimate is -$1.98.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,728 members out of 1,874 rating the stock outperform, and 146 members rating it underperform. Among 545 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 509 give USG a green thumbs-up, and 36 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on USG is hold, with an average price target of $9.56.

Over the decades, small-cap stocks like USG 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 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.

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

Advertisement