Compass Minerals International Earnings Preview

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Compass Minerals International (NYS: CMP) will look to avoid missing estimates for the fifth consecutive quarter when its earnings are released. The company will unveil its latest earnings Thursday. Compass Minerals International, through its subsidiaries, is a producer and marketer of inorganic mineral products with manufacturing sites in North America and the United Kingdom.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Compass Minerals International with analysts unanimously rating it hold. Analysts don't like Compass Minerals International as much as competitor Intrepid Potash overall. Two out of 13 analysts rate Intrepid Potash a buy compared with zero of five for Compass Minerals International. That rating hasn't budged in three months as analysts have remained steady in their opinion of the stock.
  • Revenue forecasts: On average, analysts predict $187.9 million in revenue this quarter. That would represent a rise of 5% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.52 per share. Estimates range from $0.37 to $0.70.

What our community says:
CAPS All-Stars are solidly backing the stock, with 97.5% awarding it an "outperform" rating. The community at large agrees with the All-Stars, with 96.7% granting it a rating of "outperform." Fools have embraced Compass Minerals International and haven't been shy with their opinions lately, logging 225 posts in the past 30 days. Even with a robust four out of five stars, Compass Minerals International's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Compass Minerals International's income has fallen year over year by an average of 12.8%. The company's revenue has now risen for two straight quarters. The company's gross margin shrank by 4.5 percentage points in the last quarter. Revenue rose 9.2% while cost of sales rose 16.5% to $283 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

27.5%

30.0%

30.3%

22.3%

Operating Margin

21.7%

23.2%

18.6%

10.3%

Net Margin

14.5%

17.1%

11.0%

6.3%

One final thing: If you want to keep tabs on Compass Minerals International movements, and for more analysis on the company, make sure you add it to your watchlist.

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At the time this article was published

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