Seaspan Beats on EPS but GAAP Results Lag

Seth Jayson, The Motley Fool
Updated

Seaspan (NYS: SSW) reported earnings on Feb. 29. Here are the numbers you need to know.

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

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

Gross margin increased, operating margin expanded, and net margin contracted.

Revenue details
Seaspan notched revenue of $155.2 million. The seven analysts polled by S&P Capital IQ expected to see revenue of $156.6 million on the same basis. GAAP reported sales were 32% higher than the prior-year quarter's $117.9 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
Non-GAAP EPS came in at $0.31. The nine earnings estimates compiled by S&P Capital IQ forecast $0.28 per share on the same basis. GAAP EPS of $0.13 for Q4 were 91% lower than the prior-year quarter's $1.52 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 76.9%, 220 basis points better than the prior-year quarter. Operating margin was 49.4%, 100 basis points better than the prior-year quarter. Net margin was 15.1%, 10,490 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $158.8 million. On the bottom line, the average EPS estimate is $0.15.

Next year's average estimate for revenue is $682.3 million. The average EPS estimate is $0.78.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS. Among 236 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 228 give Seaspan a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Seaspan is hold, with an average price target of $17.88.

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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. The Motley Fool owns shares of Seaspan. Motley Fool newsletter services have recommended creating a write covered straddle position in Seaspan. 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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