Tesco Crushes Estimates

Seth Jayson, The Motley Fool
Updated

Tesco (NAS: TESO) reported earnings on Feb. 24. Here are the numbers you need to know.

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

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

Margins expanded across the board.

Revenue details
Tesco logged revenue of $163.1 million. The four analysts polled by S&P Capital IQ predicted revenue of $137.7 million on the same basis. GAAP reported sales were 43% higher than the prior-year quarter's $114.2 million.

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

EPS details
EPS came in at $0.29. The six earnings estimates compiled by S&P Capital IQ predicted $0.19 per share. GAAP EPS of $0.29 for Q4 were much higher than the prior-year quarter's $0.03 per share.

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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 21.3%, 130 basis points better than the prior-year quarter. Operating margin was 10.9%, 520 basis points better than the prior-year quarter. Net margin was 7.1%, 610 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $144.0 million. On the bottom line, the average EPS estimate is $0.25.

Next year's average estimate for revenue is $596.6 million. The average EPS estimate is $1.14.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 246 members out of 259 rating the stock outperform, and 13 members rating it underperform. Among 92 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 91 give Tesco 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 Tesco is outperform, with an average price target of $18.67.

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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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