How The Wheels Came Off Ralcorp Holdings' Bus
Ralcorp Holdings (NYS: RAH) reported earnings on May 22. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended March 31 (Q2), Ralcorp Holdings beat slightly on revenues and whiffed on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share dropped significantly.
Margins contracted across the board.
Ralcorp Holdings reported revenue of $1.06 billion. The 10 analysts polled by S&P Capital IQ anticipated sales of $1.05 billion on the same basis. GAAP reported sales were 9.4% lower than the prior-year quarter's $1.17 billion.
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 $0.72. The 11 earnings estimates compiled by S&P Capital IQ predicted $0.84 per share. GAAP EPS of $0.47 for Q2 were 69% lower than the prior-year quarter's $1.50 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 21.0%, 800 basis points worse than the prior-year quarter. Operating margin was 7.2%, 680 basis points worse than the prior-year quarter. Net margin was 2.5%, 460 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $1.03 billion. On the bottom line, the average EPS estimate is $0.75.
Next year's average estimate for revenue is $4.46 billion. The average EPS estimate is $3.49.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 129 members out of 140 rating the stock outperform, and 11 members rating it underperform. Among 47 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 46 give Ralcorp Holdings a green thumbs-up, and one give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Ralcorp Holdings is outperform, with an average price target of $78.75.
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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.
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