DPL Earnings Preview

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Investors braced for a bumpy ride ahead of DPL's (NYS: DPL) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Monday. DPL is a regional electric energy and utility company, mainly engaged in the generation, transmission, and distribution of electricity in West Central Ohio through its principal subsidiary, DP&L.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on DPL with analysts unanimously rating it hold. Analysts don't like DPL as much as competitor Alliant Energy overall. Four out of nine analysts rate Alliant Energy a buy compared to zero of six for DPL. That rating hasn't budged in three months as analysts have remained steadfast in their opinion of the stock.
  • Revenue forecasts: On average, analysts predict $533 million 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 $0.76 per share.

What our community says:
CAPS All-Stars are solidly backing the stock with 95.2% assigning it an outperform rating. The community at large backs the All-Stars with 85% awarding it a rating of outperform. Fools are keen on DPL, though the message boards have been quiet lately with only 35 posts in the past 30 days. Despite the majority sentiment in favor of DPL, the stock has a middling CAPS rating of three out of five stars.

Management:
DPL's income has fallen year over year by an average of 4.1% over the past five quarters. A year-over-year revenue decrease last quarter snaps a streak of three consecutive quarters of revenue increases. The company's gross margin shrank by 9.8 percentage points in the last quarter. Revenue fell 0.1% while cost of sales rose 16% to $312.5 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

Q2

Q1

Q4

Q3

Gross Margin

29.8%

35.5%

40.4%

40.5%

Net Margin

7.1%

8.8%

15.2%

16.7%

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

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At the time this article was published

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