CTS Beats on EPS But GAAP Results Lag

CTS (NYS: CTS) reported earnings on July 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), CTS missed estimates on revenues and beat expectations on earnings per share.

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

Gross margins grew, operating margins expanded, net margins shrank.

Revenue details
CTS reported revenue of $151.6 million. The one analyst polled by S&P Capital IQ anticipated revenue of $155.6 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

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 $0.20. The one earnings estimate compiled by S&P Capital IQ forecast $0.19 per share. Non-GAAP EPS of $0.20 for Q2 were 11% higher than the prior-year quarter's $0.18 per share. GAAP EPS were -$0.34 for Q2 compared to $0.10 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 23.4%, 610 basis points better than the prior-year quarter. Operating margin was 5.9%, 450 basis points better than the prior-year quarter. Net margin was -7.5%, 960 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $160.6 million. On the bottom line, the average EPS estimate is $0.23.

Next year's average estimate for revenue is $628.6 million. The average EPS estimate is $0.80.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on CTS is buy, with an average price target of $14.25.

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