Universal Electronics Earnings Preview

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Universal Electronics (NAS: UEIC) 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 Thursday. Universal Electronics is engaged in the development of a line of pre-programmed universal wireless control products and audio-video accessories that are marketed to enhance home entertainment systems.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Universal Electronics, with six of seven rating it a buy and the remainder rating it a hold. That rating hasn't budged in three months as analysts have remained steady in their opinion of the stock.
  • Revenue Forecasts: On average, analysts predict $118.7 million in revenue this quarter. That would represent a rise of 50.4% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.47 per share. Estimates range from $0.43 to $0.49.

What our community says:
CAPS All-Stars are solidly behind the stock with 100% granting it an "outperform" rating. The community at large concurs with the All-Stars with 94.9% giving it a rating of "outperform." Fools have embraced Universal Electronics, though the message boards have been quiet lately with only 24 posts in the past 30 days. Universal Electronics has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
The company's revenue has now risen for two straight quarters. The company's gross margin shrank by 4.8 percentage points in the last quarter. Revenue rose 48.1% while cost of sales rose 58.4% to $78.1 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

26.1%

27.9%

32.6%

34.8%

Operating Margin

2.4%

4.6%

8.3%

9.3%

Net Margin

1.7%

3.7%

6.0%

6.1%

One final thing: If you want to keep tabs on Universal Electronics 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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