CEC Entertainment Earnings: Here’s Why Investors are Ambivalent Now

CEC Entertainment Inc. (NYSE:CEC) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company.

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CEC Entertainment Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 4.97% to $1.9 in the quarter versus EPS of $1.81 in the year-earlier quarter.

Revenue: Rose 3.46% to $255.3 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: CEC Entertainment Inc. reported adjusted EPS income of $1.9 per share. By that measure, the company beat the mean analyst estimate of $1.81. It beat the average revenue estimate of $247.78 million.

Quoting Management: Michael Magusiak, President and Chief Executive Officer, stated, “During the first quarter of 2013, our new value pricing, marketing and operational strategies were fully implemented for the first time. While we recognize that considerable uncertainty remains in the U.S. economy and that consumers continue to experience various financial pressures, we are encouraged by the 1.6% increase in comparable store sales this quarter. We are fully committed to our strategic plan, and to returning capital to our shareholders as evidenced by our recently announced quarterly cash dividend of $0.24 per share and an additional authorization to repurchase $100 million under our stock repurchase plan.”

Key Stats (on next page)…

Revenue increased 43.62% from $177.76 million in the previous quarter. EPS increased to $1.9 in the quarter versus EPS of $-0.03 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.28 and has not changed. For the current year, the average estimate has moved down from a profit of $2.88 to a profit of $2.69 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)