Eagle Materials Beats on EPS but GAAP Results Lag

Seth Jayson, The Motley Fool
Updated

Eagle Materials (NYS: EXP) reported earnings Feb. 2. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q3), Eagle Materials beat expectations on revenues and beat expectations on earnings per share.

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

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

Revenue details
Eagle Materials notched revenue of $123.6 million. The 11 analysts polled by S&P Capital IQ expected to see net sales of $113.9 million. Sales were 19% higher than the prior-year quarter's $103.9 million.

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

EPS details
Non-GAAP EPS came in at $0.20. The 14 earnings estimates compiled by S&P Capital IQ predicted $0.13 per share on the same basis. GAAP EPS of $0.07 for Q3 were 42% lower than the prior-year quarter's $0.12 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 10.1%, 260 basis points better than the prior-year quarter. Operating margin was 6.6%, 270 basis points better than the prior-year quarter. Net margin was 2.3%, 300 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $111.1 million. On the bottom line, the average EPS estimate is $0.19.

Next year's average estimate for revenue is $488.0 million. The average EPS estimate is $0.58.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 352 members out of 382 rating the stock outperform, and 30 members rating it underperform. Among 148 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 142 give Eagle Materials a green thumbs-up, and six give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Eagle Materials is hold, with an average price target of $24.50.

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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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