SXC Health Solutions Beats on Revenue, Matches Expectations on EPS

Seth Jayson, The Motley Fool
Updated

SXC Health Solutions (NAS: SXCI) reported earnings on Feb. 23. Here are the numbers you need to know.

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

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

Margins dropped across the board.

Revenue details
SXC Health Solutions booked revenue of $1.38 billion. The 21 analysts polled by S&P Capital IQ expected revenue of $1.27 billion on the same basis. GAAP reported sales were much higher than the prior-year quarter's $526.9 million.

anImage
anImage

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.48. The 21 earnings estimates compiled by S&P Capital IQ forecast $0.48 per share on the same basis. GAAP EPS of $0.42 for Q4 were 56% higher than the prior-year quarter's $0.27 per share.

anImage
anImage

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 6.5%, 440 basis points worse than the prior-year quarter. Operating margin was 2.9%, 240 basis points worse than the prior-year quarter. Net margin was 1.9%, 130 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.55 billion. On the bottom line, the average EPS estimate is $0.49.

Next year's average estimate for revenue is $6.63 billion. The average EPS estimate is $2.30.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 277 members out of 291 rating the stock outperform, and 14 members rating it underperform. Among 113 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 111 give SXC Health Solutions 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 SXC Health Solutions is outperform, with an average price target of $65.03.

The healthcare investing landscape is littered with also-rans and a few major winners. Is SXC Health Solutions the right stock for you? Read "Discover the Next Rule-Breaking Multibagger" to learn about a company David Gardner believes will be a phenomenal success over the next few years. 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. Motley Fool newsletter services have recommended buying shares of SXC Health Solutions. 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