Earnings Miss: Citic Press Corporation Missed EPS By 35% And Analysts Are Revising Their Forecasts

Citic Press Corporation (SZSE:300788) missed earnings with its latest yearly results, disappointing overly-optimistic forecasters. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥1.7b, statutory earnings missed forecasts by an incredible 35%, coming in at just CN¥0.61 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Citic Press after the latest results.

See our latest analysis for Citic Press

Taking into account the latest results, the current consensus from Citic Press' six analysts is for revenues of CN¥1.93b in 2024. This would reflect a notable 12% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 36% to CN¥0.83. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥2.22b and earnings per share (EPS) of CN¥1.28 in 2024. Indeed, we can see that the analysts are a lot more bearish about Citic Press' prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

The analysts made no major changes to their price target of CN¥32.63, suggesting the downgrades are not expected to have a long-term impact on Citic Press' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Citic Press, with the most bullish analyst valuing it at CN¥34.67 and the most bearish at CN¥31.10 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Citic Press is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Citic Press' rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Citic Press is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Citic Press. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at CN¥32.63, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Citic Press. Long-term earnings power is much more important than next year's profits. We have forecasts for Citic Press going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Citic Press (1 is a bit unpleasant!) that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.