The Scotts Miracle-Gro Co. Earnings: Here’s Why Shares Are Growing Now

The Scotts Miracle-Gro Co. (NYSE:SMG) had a loss and missed Wall Street’s expectations, BUT beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 2.5%.

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The Scotts Miracle-Gro Co. Earnings Cheat Sheet

Results: Net loss decreased -7.58% to $68.3 million ($1.12 per diluted share) in the quarter versus a net loss of $73.9 million in the year-earlier quarter.

Revenue: Decreased 2.56% to $205.8 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: The Scotts Miracle-Gro Co. reported adjusted net loss of $1.12 per share. By that measure, the company missed the mean analyst estimate of $0. It beat the average revenue estimate of $199.65 million.

Quoting Management: “Our immediate focus is to leverage our cost structure with an eye toward margin improvement, reduced SG&A and improved cash flow,” said CEO, James Hagedorn. “And we are taking a balanced approach in how we invest for long-term growth. I am confident in the plan we have put in place and believe our shareholders will begin to see significant improvement starting in the second half of the year.”

Key Stats (on next page)…

Revenue decreased 45.73% from $379.2 million in the previous quarter. Net loss increased 70.32% from $40.1 million 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 $2.29 to a profit $2.09. For the current year, the average estimate has moved up from a profit of $2.57 to a profit of $2.6 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)