Black Hills Earnings Preview

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Black Hills (NYS: BKH) hasn't been able to establish an earnings trend, bouncing between beating and falling short of estimates during the past fiscal year. The company will unveil its latest earnings Thursday. Black Hills is an energy company that operates utilities and nonregulated energy groups. The utilities segment includes electric utilities and gas utilities, while the nonregulated energy group is oil and gas and power generation.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Black Hills with five of six analysts rating it hold. Analysts don't like Black Hills as much as competitor NorthWestern overall. Three out of seven analysts rate NorthWestern a buy compared to one of six for Black Hills. Analysts haven't adjusted their rating of Black Hills for the past three months.
  • Revenue forecasts: On average, analysts predict $271.5 million in revenue this quarter. That would represent a rise of 0.1% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.16 per share. Estimates range from $0.14 to $0.20.

What our community says:
CAPS All-Stars are solidly backing the stock with 97% awarding it an "outperform" rating. The community at large backs the All-Stars, with 89.7% assigning it a rating of "outperform." Fools are bullish on Black Hills, though the message boards have been quiet lately with only 27 posts in the past 30 days. The bullish CAPS rating of five out of five stars for Black Hills outpaces Foolish enthusiasm for the company.

Management:
Revenue has fallen in the past two quarters. The company's gross margin shrank by 9.5 percentage points in the last quarter. Revenue fell 8.8% while cost of sales rose 4.1% to $307.4 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 and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

23.8%

(14.5%)

45.9%

43.7%

Net Margin

6.7%

10.2%

4.7%

(3.2%)

One final thing: If you want to keep tabs on Black Hills' 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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