Cambrex Earnings Preview

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Investors are on the edge of their collective seats, hoping Cambrex (NYS: CBM) will top analyst expectations for the third consecutive quarter. The company will unveil its latest earnings Monday. Cambrex provides essential products and services to accelerate drug discovery, development, and manufacturing processes for human therapeutics.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Cambrex with analysts unanimously rating it hold. Analysts don't like Cambrex as much as competitor SeraCare Life overall. Three out of four analysts rate SeraCare Life a buy compared with zero of two for Cambrex. Analysts haven't adjusted their rating of Cambrex for the past three months.
  • Revenue Forecasts: On average, analysts predict $54.9 million in revenue this quarter. That would represent a rise of 12.3% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.07 per share. Estimates range from $0.06 to $0.08.

What our community says:
CAPS All-Stars are solidly behind the stock with 83.3% awarding it an "outperform" rating. The community at large agrees with the All-Stars with 78.1% granting it a rating of "outperform." Fools are bullish on Cambrex, though the message boards have been quiet lately with only 21 posts in the past 30 days. Cambrex's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Revenue has now gone up for three straight quarters. The company's gross margin shrank by 2.9 percentage points in the last quarter. Revenue rose 17.5% while cost of sales rose 22.4% to $49.3 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.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

27.9%

28.8%

31.3%

29.5%

Operating Margin

10.7%

8.8%

12.9%

2.6%

Net Margin

7%

4.5%

7.2%

(3.0%)

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

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At the time this article was published

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