Precision Castparts Earnings: Here’s Why Investors are Ambivalent Now

Precision Castparts Corp. (NYSE:PCP) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.

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Precision Castparts Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 22.08% to $2.82 in the quarter versus EPS of $2.31 in the year-earlier quarter.

Revenue: Rose 26.18% to $2.44 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Precision Castparts Corp. reported adjusted EPS income of $2.82 per share. By that measure, the company beat the mean analyst estimate of $2.76. It missed the average revenue estimate of $2.51 billion.

Quoting Management: “In our fourth quarter, we started to realize the solid benefits of a long-term plan for continued profitable growth,” said Mark Donegan, chairman and chief executive officer of Precision Castparts. “We have focused on and have been diligent in acquiring the right assets over the last few years, and now those acquisitions have started to deliver on the value we anticipated. Our fourth quarter performance is only an initial data point on a long continuum for improved sales and earnings performance in the future.”

Key Stats (on next page)…

Revenue increased 19.37% from $2.04 billion in the previous quarter. EPS increased 21.55% from $2.32 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 $2.85 to a profit $2.84. For the current year, the average estimate has moved down from a profit of $9.8 to a profit of $9.73 over the last ninety days.

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