Northwest Natural Gas Earnings Preview

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Investors never know what to expect for Northwest Natural Gas (NYS: NWN) , as it has wavered between topping and missing analysts estimates during the past fiscal year. The company will unveil its latest earnings on Wednesday, Aug. 3. Northwest Natural Gas is mainly engaged in the distribution of natural gas in Oregon and southwest Washington.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Northwest Natural Gas, with six of nine rating it a hold. Analysts like Northwest Natural Gas better than competitor Laclede Group overall. Zero out of two analysts rate Laclede Group a buy, compared with three of nine for Northwest Natural Gas. While analysts still rate the stock a hold, they are a little more optimistic about it compared with three months ago.
  • Revenue forecasts: On average, analysts predict $76.5 million in revenue this quarter. That would represent a rise of 6% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.23 per share. Estimates range from $0.20 to $0.27.

What our community says:
CAPS All-Stars are solidly behind the stock, with 95.2% granting it an "outperform" rating. The community at large concurs with the All-Stars, with 95.4% giving it a rating of "outperform." Fools are gung-ho about Northwest Natural Gas, though the message boards have been quiet lately, with only 31 posts in the past 30 days. Northwest Natural Gas has a bullish CAPS rating of five out of five stars that is about on par with the Fool community's assessment.

Management:
A year-over-year revenue increase last quarter snaps a streak of two consecutive quarters of revenue declines. Revenue rose 12.8% in the first quarter of this fiscal year and fell 13.3% in the fourth quarter and 18.6% in the third quarter of the last fiscal year.

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 and net margins over the past four quarters. 

QuarterQ1Q4Q3Q2
Gross Margin32%31%20.3%27%
Net Margin12.6%11%(7.8%)4.2%
For all our Northwest Natural Gas-specific analysis, including earnings and beyond, add Northwest Natural Gas to My Watchlist.

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