Lincare Holdings Earnings Preview

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Lincare Holdings (NAS: LNCR) didn't meet the Street's expectations last quarter, but investors hope that it will rebound. The company will unveil its latest earnings on Monday, Oct. 17. Lincare Holdings, together with its subsidiaries, is a provider of oxygen and other respiratory therapy services to patients in the home.

What analysts say:

  • Buy, sell, or hold?: Half of analysts think investors should stand pat on Lincare Holdings while the remaining half rate the stock as a buy. Analysts like Lincare Holdings better than competitor Owens & Minor overall. One out of nine analysts rate Owens & Minor a buy compared to four of eight for Lincare Holdings. That rating hasn't budged in three months as analysts have remained unchanged in their opinions of the stock.
  • Revenue forecasts: On average, analysts predict $455.1 million in revenue this quarter. That would represent a rise of 8.7% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.48 per share. Estimates range from $0.47 to $0.49.

What our community says:
CAPS All-Stars are solidly behind the stock with 90.2% granting it an "outperform" rating. The community at large backs the All-Stars with 83.9% assigning it a rating of "outperform." Fools have embraced Lincare Holdings, though the message boards have been quiet lately with only 55 posts in the past 30 days. Despite the majority sentiment in favor of Lincare Holdings, the stock has a middling CAPS rating of three out of five stars.

Management:
Lincare Holdings' profit has risen year over year by an average of 9.5% over the past five quarters. Revenue has now gone up for three straight quarters. The company's gross margin shrank by 4.5 percentage points in the last quarter. Revenue rose 7.3% while cost of sales rose 25.3% to $142.3 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. 

QuarterQ2Q1Q4Q3
Gross Margin68.3%71.2%49.1%48.5%
Operating Margin17.8%19.6%20.0%20.0%
Net Margin9.5%10.7%10.9%10.9%

One final thing: If you want to keep tabs on Lincare Holdings 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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