Standard Pacific Earnings Preview

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Standard Pacific (NYS: SPF) 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 on Thursday, Oct. 27. Standard Pacific is a builder of single-family attached and detached homes for use as primary residences with operations in the metropolitan markets in California, Florida, Arizona, Texas, the Carolinas, Colorado, and Nevada.

What analysts say:

  • Buy, sell, or hold?: Half of analysts think investors should stand pat on Standard Pacific while the remaining half rate the stock as a buy. Analysts like Standard Pacific better than competitor Meritage Homes overall. Four out of nine analysts rate Meritage Homes a buy compared to four of eight for Standard Pacific. 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 $241.3 million in revenue this quarter. That would represent a rise of 16.3% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.02 per share. Estimates range from $0.01 to $0.02.

What our community says:
Most CAPS All-Stars are skeptical of SPF prospects, with 61.9% giving it an "underperform" rating. While the All-Stars do not like SPF, the community does, with 59.9% granting it an "outperform" rating. Fools are skeptical of Standard Pacific and haven't been shy with their opinions lately, logging 557 posts in the past 30 days. Standard Pacific's bearish CAPS rating of two out of five stars reflects community sentiment.

Management:
Revenue has fallen for the past three quarters. The company's gross margin shrank by five percentage points in the last quarter. Revenue fell 35.6% while cost of sales fell 31.5% to $172 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

16.9%

21.0%

18.0%

24.8%

Operating Margin

(1.7%)

(2.9%)

(26.3%)

6.3%

Net Margin

(5.1%)

(10.2%)

(7.4%)

0.9%

One final thing: If you want to keep tabs on Standard Pacific 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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