Neenah Paper Crushes Earnings Estimates

Seth Jayson, The Motley Fool
Updated

Neenah Paper (NYS: NP) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Neenah Paper missed estimates on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue increased and GAAP earnings per share expanded significantly.


Margins increased across the board.

Revenue details
Neenah Paper booked revenue of $198.2 million. The one analyst polled by S&P Capital IQ expected revenue of $206.0 million on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $172.7 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 $0.77. The three earnings estimates compiled by S&P Capital IQ predicted $0.62 per share. GAAP EPS of $0.54 for Q1 were 23% higher than the prior-year quarter's $0.44 per share. (The prior-year quarter included -$0.01 per share in earnings from discontinued operations.)

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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 21.1%, 190 basis points better than the prior-year quarter. Operating margin was 11.2%, 120 basis points better than the prior-year quarter. Net margin was 4.5%, 50 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $223 million. On the bottom line, the average EPS estimate is $0.70.

Next year's average estimate for revenue is $787.6 million. The average EPS estimate is $2.46.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 113 members rating the stock outperform and 15 members rating it underperform. Among 44 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 42 give Neenah Paper 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 Neenah Paper is outperform, with an average price target of $35.00.

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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. 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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