The Gory Details of Martha Stewart Living Omnimedia's Earnings Miss

Seth Jayson, The Motley Fool
Updated

Martha Stewart Living Omnimedia (NYS: MSO) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Martha Stewart Living Omnimedia missed estimates on revenues and whiffed on earnings per share.

Compared to the prior-year quarter, revenue dropped significantly and GAAP earnings per share didn't move.

Gross margins dropped, operating margins contracted, net margins expanded.

Revenue details
Martha Stewart Living Omnimedia booked revenue of $61.7 million. The two analysts polled by S&P Capital IQ looked for a top line of $63.9 million on the same basis. GAAP reported sales were 15% lower than the prior-year quarter's $72.6 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 $0.01. The one earnings estimate compiled by S&P Capital IQ averaged $0.10 per share on the same basis. GAAP EPS of $0.07 were the same as the prior-year quarter.

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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 46.3%, 80 basis points worse than the prior-year quarter. Operating margin was 2.1%, 260 basis points worse than the prior-year quarter. Net margin was 6.8%, 110 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $55.5 million. On the bottom line, the average EPS estimate is -$0.04.

Next year's average estimate for revenue is $235.5 million. The average EPS estimate is $0.02.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 203 members out of 313 rating the stock outperform, and 110 members rating it underperform. Among 71 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 38 give Martha Stewart Living Omnimedia a green thumbs-up, and 33 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Martha Stewart Living Omnimedia is outperform, with an average price target of $4.67.

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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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