Con-way Earnings Preview

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Con-way (NYS: CNW) will look to avoid missing estimates again when it unveils its latest earnings on Thursday, Aug. 4. Con-way provides transportation, logistics, and supply-chain management services for a wide range of manufacturing, industrial, and retail customers. It is divided into five reporting segments: Freight, Logistics, Truckload, Vector, and Other.

What analysts say:

  • Buy, sell, or hold?: Analysts are bullish on Con-way, as 10 rate it as a buy and only two rate call it a sell. Analysts don't like Con-way as much as competitor Old Dominion Freight Line overall. Analysts still rate the stock a hold, but they are a bit more wary about it compared with three months ago.
  • Revenue forecasts: On average, analysts predict $1.35 billion in revenue this quarter. That would represent a rise of 3.1% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.50 per share. Estimates range from $0.33 to $0.58.

What our community says:
The majority of CAPS All-Stars see Con-way as a good bet, with 70.7% giving it an "outperform" rating. The majority of Fools are in agreement with the All-Stars as 77.1% give it an "outperform" rating. Fools are keen on Con-way, though the message boards have been quiet lately, with only 59 posts in the past 30 days. Con-way's bearish CAPS rating of one out of five stars falls short of the Fool community's sentiment.

Management:
Revenue has now gone up for three straight quarters. The company's gross margin shrank by 2.2 percentage points in the last quarter. Revenue rose 7.2% while cost of sales rose 11.9% to $641 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.

QuarterQ1Q4Q3Q2
Gross Margin48.5%48.7%49.5%48.8%
Operating Margin2.9%2.1%3.6%2.7%
Net Margin0.6%0.2%(0.6%)1.1%
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