Gen-Probe Earnings Preview

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Investors are on the edge of their collective seats, hoping that Gen-Probe (NAS: GPRO) will top analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings on Wednesday, Nov. 2. Gen-Probe is engaged in the development, manufacturing, and marketing of rapid, accurate, and cost-effective nucleic acid tests used to diagnose human diseases and screen donated human blood.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Gen-Probe with 10 of 19 analysts rating it hold. Analysts don't like Gen-Probe as much as competitor Bio-Rad Laboratories overall. Four out of five analysts rate Bio-Rad Laboratories a buy compared to nine of 19 for Gen-Probe. Analysts still rate the stock a hold, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $140.6 million in revenue this quarter. That would represent a rise of 6.1% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.54 per share. Estimates range from $0.53 to $0.58.

What our community says:
CAPS All-Stars are solidly behind the stock with 98.6% granting it an "outperform" rating. The community at large agrees with the All-Stars with 96.3% assigning it a rating of "outperform." Fools have embraced Gen-Probe, though the message boards have been quiet lately with only 56 posts in the past 30 days. Despite the majority sentiment in favor of Gen-Probe, the stock has a middling CAPS rating of three out of five stars.

Management:
Gen-Probe's profit has risen year over year by an average of 3.1% over the past five quarters.

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

71.0%

70.7%

70.7%

68.2%

Operating Margin

21.9%

24.2%

27.0%

26.7%

Net Margin

16.4%

16.3%

19.9%

20.7%

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At the time this article was published

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