Rock-Tenn Company Earnings Preview

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Rock-Tenn Company (NYS: RKT) didn't hit the Street's expectations last quarter, but investors hope that it will rebound this quarter. The company will unveil its latest earnings on Tuesday, August 2. Rock-Tenn Company (RockTenn) is a manufacturer of packaging products, recycled paperboard, containerboard, bleached paperboard, and merchandising displays. It operates in four segments: consumer packaging, corrugated packaging, and merchandising displays.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Rock-Tenn Company, with five of six rating it a buy and the remainder rating it a hold. Analysts don't like Rock-Tenn Company as much as competitor Packaging Corp of America overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $1.33 billion in revenue this quarter. That would represent a rise of 72.3% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $1.20 per share. Estimates range from $1.08 to $1.49.

What our community says:
CAPS All Stars are solidly behind the stock, with 96.3% granting it an "outperform" rating. The community at large backs the All Stars, with 94.8% assigning it a rating of "outperform." Fools have embraced Rock-Tenn Company, though the message boards have been quiet lately with only 52 posts in the past 30 days. Rock-Tenn Company has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
Rock-Tenn Company's income has fallen year over year by an average of 2.6%. Revenue has now gone up for three straight 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

Q2

Q1

Q4

Q3

Gross Margin

21.0%

23.5%

25.3%

22.8%

Operating Margin

9.0%

12.5%

14.0%

11.8%

Net Margin

4.7%

6.6%

11.3%

5.8%

One final thing: If you want to keep tabs on Rock-Tenn Company movements, and for more analysis on the company, make sure you add it to your Watchlist.

The Motley Fool owns shares of Rock-Tenn.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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