KapStone Paper and Packaging Earnings Preview

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KapStone Paper and Packaging (NYS: KS) beat estimates by $0.02 last quarter and investors are hoping it can beat them again. The company will unveil its latest earnings on Wednesday, Nov. 2. KapStone Paper and Packaging produces and sells a variety of paper products.

What analysts say:

  • Buy, sell, or hold?: The majority of analysts back KapStone as a buy. But with 60% of analysts rating it a buy, KapStone is still below the mean analyst rating of its nearest eight competitors, which average 70% buys. Analysts don't like KapStone as much as competitor Boise overall. Three out of four analysts rate Boise a buy compared to three of five for KapStone. KapStone's rating hasn't changed over the past three months.
  • Revenue forecasts: On average, analysts predict $214.3 million in revenue this quarter. That would represent a rise of 3.3% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.39 per share. Estimates range from $0.34 to $0.43.

What our community says:
CAPS All-Stars are solidly behind the stock with 97% giving it an "outperform" rating. The community at large backs the All-Stars with 93.8% awarding it a rating of "outperform." Fools have embraced KapStone, though the message boards have been quiet lately with only 42 posts in the past 30 days. Despite the majority sentiment in favor of KapStone, the stock has a middling CAPS rating of three out of five stars.

Management:
KapStone's profit has risen year over year by an average of 73.5% over the past five quarters. Revenue has now gone up for three straight 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

33.4%

31.0%

26.8%

31.5%

Operating Margin

14.3%

12.3%

8.8%

12.8%

Net Margin

8.5%

7.3%

6.6%

18.5%

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

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At the time this article was published

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