MTS Systems Corp. (NASDAQ:MTSC) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.
MTS Systems Corp. Earnings Cheat Sheet
Results: Adjusted Earnings Per Share decreased 32.71% to $0.72 in the quarter versus EPS of $1.07 in the year-earlier quarter.
Revenue: Decreased 4.69% to $135.06 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: MTS Systems Corp. reported adjusted EPS income of $0.72 per share. By that measure, the company missed the mean analyst estimate of $0.84. It missed the average revenue estimate of $138 million.
Quoting Management: “Our results in the third quarter were generally in line with the expectations that we communicated last quarter,” said Dr. Jeffrey Graves, President and Chief Executive Officer of MTS Systems. “Third quarter revenue was relatively flat compared to the fiscal 2013 second quarter, as we had indicated. Revenue was impacted by the timing of customer orders in our Test backlog, which is heavily skewed to the fourth quarter. As anticipated, earnings increased on a consecutive basis from the second quarter. From an orders standpoint, we did experience a continuation of the timing delays in our Test business that had impacted us in the second quarter, as our customers continue to scrutinize their capital spending. Based on discussions with customers, we believe they continue to move forward with their projects but are taking a more cautious approach to the timing of purchases. We are encouraged by the 2 percent net increase in our Sensors segment orders, including a 4 percent negative currency impact. For our Sensors segment, this represents our second quarter of sequential growth, which was driven by a broad-based improvement in our markets.”
Key Stats (on next page)…
Revenue decreased 1.36% from $136.92 million in the previous quarter. EPS increased 4.35% from $0.69 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 $1.20 to a profit $1.04. For the current year, the average estimate has moved down from a profit of $4.06 to a profit of $3.45 over the last ninety days.
Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.
(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)