Interface Earnings: Here’s Why Investors are Ambivalent Now

Interface Inc. (NASDAQ:TILE) delivered a profit and met 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.

Interface Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 6.25% to $0.17 in the quarter versus EPS of $0.16 in the year-earlier quarter.

Revenue: Decreased 4.37% to $243.48 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: reported adjusted EPS income of $0.17 per share. By that measure, the company missed the mean analyst estimate of $0.17. It beat the average revenue estimate of $237.35 million.

Quoting Management: “We made tremendous strides improving our performance during the second quarter, reflected by our increased sales, gross margin and earnings,” said Daniel T. Hendrix, Chairman and Chief Executive Officer of the Company. “We’re very pleased with our surge in the Americas business, with sales up 12% year-over-year and well ahead of the overall commercial market. Gross margin in the Americas dramatically improved on a sequential basis, putting us on track to return to historical peak levels. Our Asia-Pacific business also saw growth in the quarter, with solid results out of Southeast Asia and China and with Australia’s top line pulling near the pre-fire second quarter last year. In Europe, we saw modest sales improvement sequentially versus the first quarter and the region continues to maintain profitability, outperforming the industry in a challenging economy and business environment.”

Key Stats (on next page)…

Revenue increased 15.74% from $210.37 million in the previous quarter. EPS increased 112.5% from $0.08 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.25 to a profit $0.23. For the current year, the average estimate has moved down from a profit of $0.84 to a profit of $0.73 over the last ninety days.

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