Sunrise Senior Living Makes Analysts Look Bad

Seth Jayson, The Motley Fool
Updated

Sunrise Senior Living (NYS: SRZ) reported earnings yesterday. Here are the numbers you need to know.

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

Compared to the prior-year quarter, revenue expanded, and GAAP earnings per share dropped significantly. The non-GAAP profit was a surprise, as analysts had predicted a loss.

Gross margins were steady, operating margins shrank, and net margins dropped.

Revenue details
Sunrise Senior Living tallied revenue of $330.6 million. The one analyst polled by S&P Capital IQ expected to see a top line of $337.1 million on the same basis. GAAP reported sales were 3.6% higher than the prior-year quarter's $319 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 $0.17. The one earnings estimate compiled by S&P Capital IQ anticipated -$0.07 per share on the same basis. GAAP EPS of $0.02 for Q4 were 98% lower than the prior-year quarter's $0.86 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 18.6%, about the same as the prior-year quarter. Operating margin was 0.5%, 280 basis points worse than the prior-year quarter. Net margin was 0.5%, 1,520 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $337.8 million. On the bottom line, the average EPS estimate is -$0.02.

Next year's average estimate for revenue is $1.36 billion. The average EPS estimate is $0.05.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 485 members rating the stock outperform and 53 members rating it underperform. Among 141 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 128 give Sunrise Senior Living a green thumbs-up, and 13 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Sunrise Senior Living is buy, with an average price target of $10.

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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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