Resources Connection Beats Analyst Estimates on EPS
Resources Connection (NAS: RECN) reported earnings on March 28. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended Feb. 25 (Q3), Resources Connection met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded and GAAP earnings per share expanded significantly.
Margins improved across the board.
Resources Connection chalked up revenue of $143.3 million. The eight analysts polled by S&P Capital IQ hoped for a top line of $143.3 million on the same basis. GAAP reported sales were 4.1% higher than the prior-year quarter's $137.6 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.10. The nine earnings estimates compiled by S&P Capital IQ predicted $0.08 per share. GAAP EPS of $0.10 for Q3 were 400% higher than the prior-year quarter's $0.02 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 37.4%, 40 basis points better than the prior-year quarter. Operating margin was 5.8%, 390 basis points better than the prior-year quarter. Net margin was 3.0%, 250 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $149.0 million. On the bottom line, the average EPS estimate is $0.14.
Next year's average estimate for revenue is $579.1 million. The average EPS estimate is $0.42.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 159 members out of 176 rating the stock outperform, and 17 members rating it underperform. Among 64 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 60 give Resources Connection a green thumbs-up, and four give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Resources Connection is outperform, with an average price target of $13.22.
Over the decades, small-cap stocks like Resources Connection have provided market-beating returns, provided they're value priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add Resources Connection to My Watchlist.
At the time this article 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.