Simpson Manufacturing Earnings Preview

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Investors braced for a bumpy ride ahead of Simpson Manufacturing's (NYS: SSD) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings Thursday. Simpson Manufacturing designs, engineers and manufactures wood-to-wood, wood-to-concrete, and wood-to-masonry connectors; screw fastening systems and collated screws; stainless steel fasteners; pre-fabricated shearwalls; and moment-frames.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Simpson Manufacturing, with seven of eight analysts rating it hold. Analysts don't like Simpson Manufacturing as much as competitor Quanex Building Products overall. Three out of eight analysts rate Quanex Building Products a buy compared with one of eight for Simpson Manufacturing. Analysts haven't adjusted their rating of Simpson Manufacturing for the past three months.
  • Revenue forecasts: On average, analysts predict $178 million in revenue this quarter. That would represent a rise of 7.5% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.38 per share. Estimates range from $0.34 to $0.44 .

What our community says:
CAPS All-Stars are solidly behind the stock, with 96.5% assigning it an "outperform" rating. The community at large concurs with the All-Stars, with 93.1% granting it a rating of "outperform." Fools have embraced Simpson Manufacturing and haven't been shy with their opinions lately, logging 180 posts in the past 30 days. Despite the majority sentiment in favor of Simpson Manufacturing, the stock has a middling CAPS rating of three out of five stars.

Management:
Revenue has fallen for the past three quarters.

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

43.0%

39.8%

44.9%

46.4%

Operating Margin

9.3%

(1.6%)

20.0%

20.5%

Net Margin

5.3%

(3.8%)

11.7%

4.0%

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Motley Fool newsletter services have recommended buying shares of Simpson Manufacturing.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

At the time this article was published

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