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Federal Signal Increases Sales but Misses Estimates on Earnings

Monday - 3/18/2013, 3:16pm  ET

Federal Signal filed its 10-K on March 15. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Federal Signal beat expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue contracted slightly. Non-GAAP earnings per share dropped. GAAP earnings per share increased.

Gross margins dropped, operating margins expanded, net margins expanded.

Revenue details
Federal Signal recorded revenue of $217.7 million. The two analysts polled by S&P Capital IQ anticipated revenue of $208.4 million on the same basis. GAAP reported sales were 12% higher than the prior-year quarter's $195.0 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 $0.08. The three earnings estimates compiled by S&P Capital IQ anticipated $0.11 per share. Non-GAAP EPS of $0.08 for Q4 were 11% lower than the prior-year quarter's $0.09 per share. (The prior-year quarter included -$0.35 per share in earnings from discontinued operations.) GAAP EPS were $0.07 for Q4 compared to -$0.25 per share for the prior-year quarter.

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 22.8%, 60 basis points worse than the prior-year quarter. Operating margin was 6.2%, 30 basis points better than the prior-year quarter. Net margin was 2.2%, 1,000 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $196.0 million. On the bottom line, the average EPS estimate is $0.10.

Next year's average estimate for revenue is $818.7 million. The average EPS estimate is $0.54.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 67 members out of 81 rating the stock outperform, and 14 members rating it underperform. Among 22 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 20 give Federal Signal a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Federal Signal is hold, with an average price target of $7.50.

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This article was originally published as Federal Signal Increases Sales but Misses Estimates on Earningson Fool.com

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