Greif Beats Estimates but Has a Big Earnings Drop

Seth Jayson, The Motley Fool
Updated

Greif (NYS: GEF) reported earnings on June 6. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended April 30 (Q2), Greif met expectations on revenues and beat expectations on earnings per share.

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


Margins contracted across the board.

Revenue details
Greif reported revenue of $1.10 billion. The seven analysts polled by S&P Capital IQ expected a top line of $1.09 billion on the same basis. GAAP reported sales were 4.2% higher than the prior-year quarter's $1.05 billion.

anImage
anImage

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 six earnings estimates compiled by S&P Capital IQ predicted $0.75 per share. GAAP EPS of $0.78 for Q2 were 27% lower than the prior-year quarter's $1.07 per share.

anImage
anImage

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 18.5%, 120 basis points worse than the prior-year quarter. Operating margin was 7.4%, 230 basis points worse than the prior-year quarter. Net margin was 3.4%, 140 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.19 billion. On the bottom line, the average EPS estimate is $1.03.

Next year's average estimate for revenue is $4.46 billion. The average EPS estimate is $3.38.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 333 members out of 342 rating the stock outperform, and nine members rating it underperform. Among 98 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 95 give Greif 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 Greif is outperform, with an average price target of $57.00.

Can your portfolio provide you with enough income to last through retirement? You'll need more than Greif. Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks." Click here for instant access to this free report.

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.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement