Ashland Beats on Both Top and Bottom Lines

Seth Jayson, The Motley Fool
Updated

Ashland (NYS: ASH) reported earnings on May 4. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended March 31 (Q2), Ashland beat slightly on revenues and beat expectations on earnings per share.

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


Margins dropped across the board.

Revenue details
 Ashland booked revenue of $2.10 billion. The seven analysts polled by S&P Capital IQ anticipated revenue of $2.07 billion on the same basis. GAAP reported sales were 34% higher than the prior-year quarter's $1.56 billion.

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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 $1.52. The nine earnings estimates compiled by S&P Capital IQ predicted $1.38 per share. GAAP EPS of $1.11 for Q2 were 82% lower than the prior-year quarter's $6.05 per share. (The prior-year quarter included $3.79 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 27.8%, 230 basis points worse than the prior-year quarter. Operating margin was 10.3%, 630 basis points worse than the prior-year quarter. Net margin was 4.2%, 2,690 basis points worse than the prior-year quarter.

Looking ahead
 Next quarter's average estimate for revenue is $2.22 billion. On the bottom line, the average EPS estimate is $1.69.

Next year's average estimate for revenue is $8.44 billion. The average EPS estimate is $5.92.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Ashland is outperform, with an average price target of $74.50.

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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