Schweitzer-Mauduit International Earnings Preview

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Investors braced for a bumpy ride ahead of Schweitzer-Mauduit International's (NYS: SWM) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings Wednesday. Schweitzer-Mauduit International is a multinational producer of premium specialty papers and is a supplier of fine papers to the tobacco industry.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Schweitzer-Mauduit International, with two of three rating it a buy and the remainder rating it a hold. That rating hasn't budged in three months as analysts have remained unchanged in their opinion of the stock.
  • Revenue Forecasts: On average, analysts predict $212.7 million in revenue this quarter. That would represent a rise of 16.8% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $1.53 per share. Estimates range from $1.35 to $1.72.

What our community says:
CAPS All-Stars are solidly backing the stock with 91.3% giving it an "outperform" rating. The community at large concurs with the All-Stars with 85.7% awarding it a rating of "outperform." Fools are bullish on Schweitzer-Mauduit International, though the message boards have been quiet lately with only 43 posts in the past 30 days. Though still bullish, the CAPS rating of four out of five stars for Schweitzer-Mauduit International is a bit more pessimistic than the community assessment.

Management:
Schweitzer-Mauduit International's profit has risen year over year by an average of 88.3% over the past five quarters. The company boosted its gross margin by 2.2 percentage points in the last quarter. Revenue rose 12.7% while cost of sales rose 9.5% to $151.1 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

26.7%

26.1%

26.4%

27.2%

Operating Margin

15.3%

14.6%

12.5%

16.9%

Net Margin

9.6%

9.0%

7.5%

10.0%

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At the time this article was published

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