OMNOVA Solutions Misses Where it Counts

Seth Jayson, The Motley Fool
Updated

OMNOVA Solutions (NYS: OMN) reported earnings on April 3. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended Feb. 28 (Q1), OMNOVA Solutions beat expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue dropped. Non-GAAP earnings per share dropped significantly. GAAP earnings per share shrank to zero.


Margins contracted across the board.

Revenue details
 OMNOVA Solutions reported revenue of $251.7 million. The three analysts polled by S&P Capital IQ expected revenue of $245.3 million on the same basis. GAAP reported sales were 8.8% lower than the prior-year quarter's $275.9 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 $0.03. The four earnings estimates compiled by S&P Capital IQ anticipated $0.10 per share. Non-GAAP EPS of $0.03 for Q1 were 86% lower than the prior-year quarter's $0.22 per share. (The prior-year quarter included $0.06 per share in earnings from discontinued operations.) GAAP EPS dropped to zero from the prior-year quarter's $0.29.

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 19.5%, 260 basis points worse than the prior-year quarter. Operating margin was 4.1%, 440 basis points worse than the prior-year quarter. Net margin was -0.1%, 500 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
 Next quarter's average estimate for revenue is $302.0 million. On the bottom line, the average EPS estimate is $0.17.

Next year's average estimate for revenue is $1.13 billion. The average EPS estimate is $0.68.

Investor sentiment
 The stock has a one-star rating (out of five) at Motley Fool CAPS, with 144 members out of 169 rating the stock outperform, and 25 members rating it underperform. Among 31 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 26 give OMNOVA Solutions a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on OMNOVA Solutions is outperform, with an average price target of $10.33.

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The article OMNOVA Solutions Misses Where it Counts 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 position in any of the stocks mentioned. 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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