Meredith Earnings Preview

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Meredith (NYS: MDP) will try to beat its earnings estimates for the fifth consecutive quarter. The company will unveil its latest earnings on Wednesday, Oct. 26. Meredith engages in magazine publishing and related brand licensing, television broadcasting, integrated marketing, interactive media, and video production related operations.

What analysts say:

  • Buy, sell, or hold?: Half of analysts think investors should stand pat on Meredith while the remaining half rate the stock as a buy. Analysts don't like Meredith as much as competitor Scholastic overall. Two out of three analysts rate Scholastic a buy compared to three out of six for Meredith. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.
  • Revenue forecasts: On average, analysts predict $326.5 million in revenue this quarter. That would represent a decline of 5.2% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.46 per share. Estimates range from $0.45 to $0.47.

What our community says:
CAPS All-Stars are solidly behind the stock, with 88.5% awarding it an outperform rating. The community at large backs the All-Stars, with 81.5% giving it a rating of outperform. Fools are bullish on Meredith, though the message boards have been quiet lately with only 54 posts in the past 30 days. Despite the majority sentiment in favor of Meredith, the stock has a middling CAPS rating of three out of five stars.

Management:
Meredith's profit has risen year over year by an average of 34.4% over the past five quarters. Revenue has fallen in the past two quarters. The company's gross margin shrank by 2.1 percentage points in the last quarter. Revenue fell 4.6% while cost of sales rose 0.7% to $137.2 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

Q4

Q3

Q2

Q1

Gross Margin

60.6%

60.3%

62.4%

58.3%

Operating Margin

16.1%

15.2%

19%

13.8%

Net Margin

8.7%

9.1%

11.1%

7.5%

One final thing: If you want to keep tabs on Meredith 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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