Eaton Vance Earnings Preview

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Eaton Vance (NYS: EV) 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 Wednesday. Eaton Vance manages investment funds and provides investment management and counseling services to high-net-worth individuals and institutions.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Eaton Vance with 10 of 14 analysts rating it hold. Analysts don't like Eaton Vance as much as competitor Waddell & Reed Financial overall. Seven out of 11 analysts rate Waddell & Reed Financial a buy compared with three of 14 for Eaton Vance. Analysts haven't adjusted their rating of Eaton Vance for the past three months.
  • Revenue Forecasts: On average, analysts predict $330.4 million in revenue this quarter. That would represent a rise of 21% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.51 per share. Estimates range from $0.47 to $0.54.

What our community says:
CAPS All-Stars are solidly backing the stock with 90.3% awarding it an "outperform" rating. The community at large concurs with the All-Stars with 85.1% granting it a rating of "outperform." Fools are gung-ho about Eaton Vance, though the message boards have been quiet lately with only 43 posts in the past 30 days. Eaton Vance's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Eaton Vance's profit has risen year over year by an average of 23.1% over the past five quarters. The company upped its gross margin by 2.3 percentage points in the last quarter. Revenue rose 19.4% while cost of sales rose 7.1% to $64.4 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, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

80.2%

79.5%

79.3%

77.0%

Operating Margin

35.9%

33.0%

34.9%

28.8%

Net Margin

19.2%

12.0%

16.6%

15.3%

For all our Eaton Vance-specific analysis, including earnings and beyond, add Eaton Vance to My Watchlist.

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At the time this article was published

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