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Small Cap Earnings Round Up (and more): PANL, CCO, FRPT, CPST

|Includes: CCO, CPST, GD, Universal Display Corporation (OLED)

How did Clear Channel Outdoor Holdings, Force Protection, Capstone Turbine, and Universal Display fare last quarter?

A handful of noteworthy small cap companies released earnings after the market closed on Monday. Here's what you need to know - and perhaps some things you didn't need to know - about Clear Channel Outdoor Holdings, Inc. (NYSE:CCO), Force Protection Inc. (NASDAQ:FRPT), Capstone Turbine Corp. (NASDAQ:CPST), and Universal Display Corp. (NASDAQ:PANL).

Not surprisingly, Clear Channel Outdoor Holdings, Inc. (CCO) saw revenue decline last quarter, though not badly.... Sales fell 24% from $915 million to $692 million. Without currency fluctuations, the decline would have been 18%.

The net loss, however, was still alarmingly high given the revenue. The outdoor advertiser's loss of $689 million as almost as high as its quarterly top line, begging the question.... where did all the money go?

In this case, an impairment charge cost the company $812 million.  Though it's still a standard GAAP expense, it does case the loss to be overstated: OIBDAN was actually positive, even of lower than 2008's comparable figure.

The company isn't expected to turn a profit this year or next, though one has to wonder if analysts are still assuming the absolute worst even though more green shoots sprout every day. With a price/sales ratio of 0.77, there's a lot of room for Clear Channel Outdoor Holdings to serve up a surprise.

Force Protection Inc. (FRPT) earned $400K last quarter (1 cent per share) thanks to a massive 95% decrease in operating income. Quarterly sales fell from $340.9 million to $187.1 million.

The bulk of the decline stemmed from huge vehicle sales during the first half of 2008 (specifically, the sales of vehicles from General Dynamics Land Systems).

While the dip in income/revenue should have and did cause a drag on the stock, bear in mind last year's comps were the ones that were artificially high; this year's Q2 and H1 aren't abnormally low. Moreover, with a forward-looking P/E of 9.4, this poor quarter already seems to be priced into Force Protection shares.
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Capstone Turbine Corp. (CPST) posted some major increases in its Q1-2010 numbers... revenue was up 83% from the same quarter a year earlier, to $13.7 million. The micro turbine maker still lost money.... $2.8 million versus a loss of $1.3 million a year ago. The bulk of the bigger loss was the result of the launch of two new products. On most other expense lines, this year's comps were lower.

On a per-share basis, the $2.8 million loss becomes about 1.5 cents, roughly in line with expectations for a 1 cent loss.

The backlog now stands at $59.1 million, which isn't bad for a company of this size. The question is, can Capstone deliver on those orders profitably?

Though all upstarts deserve a grace period, Capstone has been taking quarterly losses that have pretty much been in line and increasing - on a dollar for dollar basis - with its top line revenue going back as far as 2007. At some point those bottom line losses have to start trending in a positive direction, but after years of it for CPST there's still no clear road map about when that might happen here.

Universal Display Corp.
(PANL) lost 18 cents per share during its second quarter, slightly better than last year's 15 cent per share loss, and more than the 15 cent loss analysts were expecting this time around. Here's the bigger problem though.... revenues increased from $2.1 million to $2.9 million on a q-o-q basis, and the loss still increased.

Investors are arguing that the company's groundbreaking OLED technology is just not coming into its own. As/if it becomes the norm for display screens, then Universal Display will increase in value.
 
What these investors are not recognizing (aside from the fact that the company has never been profitable, and that its losses are bigger than its revenue) is that with a price/sales ratio above 40, the best-case scenario is already priced into PANL shares. There's not a lot of upside here... only room for disappointment.

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