Walter Energy Increases Sales but Misses Revenue Estimate

Walter Energy (NYS: WLT) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Walter Energy missed estimates on revenues and whiffed on earnings per share.

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


Margins dropped across the board.

Revenue details
Walter Energy logged revenue of $631.6 million. The 12 analysts polled by S&P Capital IQ anticipated a top line of $663.8 million on the same basis. GAAP reported sales were 55% higher than the prior-year quarter's $406.6 million.

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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 $0.74. The 18 earnings estimates compiled by S&P Capital IQ predicted $0.88 per share. GAAP EPS of $0.65 for Q1 were 58% lower than the prior-year quarter's $1.53 per share.

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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 31.7%, 1,460 basis points worse than the prior-year quarter. Operating margin was 13.3%, 1,860 basis points worse than the prior-year quarter. Net margin was 6.4%, 1,370 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $720.3 million. On the bottom line, the average EPS estimate is $1.55.

Next year's average estimate for revenue is $2.89 billion. The average EPS estimate is $4.44.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,486 members rating the stock outperform and 80 members rating it underperform. Among 405 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 395 give Walter Energy a green thumbs-up, and 10 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Walter Energy is outperform, with an average price target of $75.04.

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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 of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Walter Energy. 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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