Natus Medical Goes Negative

Seth Jayson, The Motley Fool
Updated

Natus Medical (NAS: BABY) reported earnings on Feb. 28. Here are the numbers you need to know.

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

Compared to the prior-year quarter, revenue increased slightly and GAAP earnings per share shrank to a loss.

Margins shrank across the board.

Revenue details
Natus Medical recorded revenue of $64.1 million. The four analysts polled by S&P Capital IQ foresaw net sales of $64.5 million on the same basis. GAAP reported sales were 0.9% higher than the prior-year quarter's $63.5 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 $0.14. The three earnings estimates compiled by S&P Capital IQ anticipated $0.14 per share on the same basis. GAAP EPS were -$0.60 for Q4 compared to $0.19 per share for 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 55.4%, 630 basis points worse than the prior-year quarter. Operating margin was 3.6%, 1,250 basis points worse than the prior-year quarter. Net margin was -27.0%, 3,550 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $60.0 million. On the bottom line, the average EPS estimate is $0.06.

Next year's average estimate for revenue is $259.4 million. The average EPS estimate is $0.57.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,283 members out of 1,317 rating the stock outperform, and 34 members rating it underperform. Among 420 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 410 give Natus Medical a green thumbs-up, and 10 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Natus Medical is hold, with an average price target of $10.00.

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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. Motley Fool newsletter services have recommended buying shares of Natus Medical. 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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