Federal Signal Increases Sales but Misses Estimates on Earnings

Seth Jayson, The Motley Fool
Updated

Federal Signal (NYS: FSS) reported earnings on May 4. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Federal Signal beat slightly on revenues and missed estimates on earnings per share.

Compared with the prior-year quarter, revenue expanded significantly and GAAP loss per share dropped.


Margins improved across the board.

Revenue details
Federal Signal logged revenue of $224.6 million. The two analysts polled by S&P Capital IQ anticipated a top line of $220.4 million on the same basis. GAAP reported sales were 29% higher than the prior-year quarter's $173.6 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
EPS came in at $0.01. The four earnings estimates compiled by S&P Capital IQ anticipated $0.02 per share. GAAP EPS were -$0.01 for Q1 compared to -$0.09 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 25.0%, 110 basis points better than the prior-year quarter. Operating margin was 3.6%, 520 basis points better than the prior-year quarter. Net margin was -0.2%, 290 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $230.6 million. On the bottom line, the average EPS estimate is $0.07.

Next year's average estimate for revenue is $924.4 million. The average EPS estimate is $0.32.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 65 members out of 80 rating the stock outperform, and 15 members rating it underperform. Among 19 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 16 give Federal Signal a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Federal Signal is hold, with an average price target of $6.00.

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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. He is the 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 don't 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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