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Can Education Management Meet These Numbers?

Monday - 1/28/2013, 10:01am  ET

Education Management is expected to report Q2 earnings on Jan. 30. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Education Management's revenues will decrease -11.7% and EPS will compress -61.2%.

The average estimate for revenue is $650.6 million. On the bottom line, the average EPS estimate is $0.19.

Revenue details
Last quarter, Education Management reported revenue of $609.6 million. GAAP reported sales were 11% lower than the prior-year quarter's $682.1 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, non-GAAP EPS came in at -$0.04. GAAP EPS were -$0.11 for Q1 against $0.21 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 38.8%, 630 basis points worse than the prior-year quarter. Operating margin was 3.8%, 740 basis points worse than the prior-year quarter. Net margin was -2.1%, 610 basis points worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $2.48 billion. The average EPS estimate is $0.43.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 32 members out of 60 rating the stock outperform, and 28 members rating it underperform. Among 22 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), eight give Education Management a green thumbs-up, and 14 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Education Management is hold, with an average price target of $5.19.

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This article was originally published as Can Education Management Meet These Numbers?on Fool.com

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