How the Wheels Came Off NeuStar's Bus

Seth Jayson, The Motley Fool
Updated

NeuStar (NYS: NSR) reported earnings on April 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), NeuStar met expectations on revenues and whiffed on earnings per share.

Compared with the prior-year quarter, revenue grew significantly and GAAP earnings per share contracted significantly.


Margins dropped across the board.

Revenue details
NeuStar logged revenue of $199.6 million. The 12 analysts polled by S&P Capital IQ wanted to see a top line of $199.1 million on the same basis. GAAP reported sales were 36% higher than the prior-year quarter's $146.5 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
EPS came in at $0.50. The 10 earnings estimates compiled by S&P Capital IQ anticipated $0.65 per share. GAAP EPS of $0.50 for Q1 were 48% lower than the prior-year quarter's $0.96 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 77.5%, 90 basis points worse than the prior-year quarter. Operating margin was 32.5%, 440 basis points worse than the prior-year quarter. Net margin was 17.0%, 3,210 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $203.1 million. On the bottom line, the average EPS estimate is $0.68.

Next year's average estimate for revenue is $820.9 million. The average EPS estimate is $2.74.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 259 members out of 271 rating the stock outperform, and 12 members rating it underperform. Among 83 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 79 give NeuStar a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on NeuStar is outperform, with an average price target of $42.40.

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At the time thisarticle was published

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