The Gory Details of Quality Systems' Double Miss

Seth Jayson, The Motley Fool
Updated

Quality Systems (NAS: QSII) reported earnings on July 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q1), Quality Systems missed estimates on revenue and missed estimates on earnings per share.

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


Margins dropped across the board.

Revenue details
Quality Systems tallied revenue of $118.3 million. The 21 analysts polled by S&P Capital IQ wanted to see revenue of $120.8 million on the same basis. GAAP reported sales were 18% higher than the prior-year quarter's $100.4 million.

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 $0.26. The 23 earnings estimates compiled by S&P Capital IQ averaged $0.35 per share. GAAP EPS of $0.26 for Q1 were 21% lower than the prior-year quarter's $0.33 per share.

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 59.1%, 610 basis points worse than the prior-year quarter. Operating margin was 19.9%, 880 basis points worse than the prior-year quarter. Net margin was 13.1%, 580 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $125.6 million. On the bottom line, the average EPS estimate is $0.38.

Next year's average estimate for revenue is $513.5 million. The average EPS estimate is $1.56.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,124 members out of 2,192 rating the stock outperform, and 68 members rating it underperform. Among 586 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 569 give Quality Systems a green thumbs-up, and 17 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Quality Systems is hold, with an average price target of $35.90.

Can your portfolio provide you with enough income to last through retirement? You'll need more than Quality Systems. 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.

The article The Gory Details of Quality Systems' Double Miss originally appeared on Fool.com.

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 has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Quality Systems. 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