Rock-Tenn Beats on EPS but GAAP Results Lag
Rock-Tenn (NYS: RKT) reported earnings on April 25. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended March 31 (Q2), Rock-Tenn met expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share shrank significantly.
Margins dropped across the board.
Rock-Tenn reported revenue of $2.28 billion. The nine analysts polled by S&P Capital IQ predicted sales of $2.27 billion on the same basis. GAAP reported sales were much higher than the prior-year quarter's $792.9 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.97. The 12 earnings estimates compiled by S&P Capital IQ predicted $0.87 per share on the same basis. GAAP EPS of $0.44 for Q2 were 53% lower than the prior-year quarter's $0.93 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 15.8%, 520 basis points worse than the prior-year quarter. Operating margin was 5.7%, 410 basis points worse than the prior-year quarter. Net margin was 1.4%, 330 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $2.35 billion. On the bottom line, the average EPS estimate is $1.07.
Next year's average estimate for revenue is $9.35 billion. The average EPS estimate is $4.83.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 182 members out of 192 rating the stock outperform, and 10 members rating it underperform. Among 38 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 36 give Rock-Tenn a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Rock-Tenn is outperform, with an average price target of $77.23.
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At the time this article 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 Rock-Tenn. 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.