Tredegar Earnings Preview

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While Tredegar (NYS: TG) missed estimates last quarter, investors hope it will bounce back and outpace Wall Street expectations this quarter. The company will unveil its latest earnings Monday. Tredegar manufactures plastic films and aluminum extrusions through its subsidiaries.

What analysts say:

  • Buy, sell, or hold?: Analysts generally think investors should hang on to Tredegar, with half rating the stock a hold. Analysts don't like Tredegar as much as competitor Guanwei Recycling overall. One out of one analysts rate Guanwei Recycling a buy compared to one of two for Tredegar. Analysts' rating of Tredegar has stayed constant from three months prior.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.22 per share. Estimates range from $0.14 to $0.30.

What our community says:
CAPS All-Stars are solidly behind the stock with 81.3% awarding it an "outperform" rating. The community at large agrees with the All-Stars with 88% giving it a rating of "outperform." Fools are bullish on Tredegar, though the message boards have been quiet lately with only 15 posts in the past 30 days. The bullish CAPS rating of five out of five stars for Tredegar outpaces Fool enthusiasm for the company.

Management:
Tredegar's income has fallen year over year by an average of 13.3%. Revenue has now gone up for three straight quarters. The company's gross margin shrank by 3.7 percentage points in the last quarter. Revenue rose 9.5% while cost of sales rose 14.5% to $161.9 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

15.5%

19.8%

19.7%

18.8%

Operating Margin

5.0%

5.8%

6.2%

4.5%

Net Margin

3.5%

4.0%

4.5%

2.7%

One final thing: If you want to keep tabs on Tredegar 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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