American Vanguard Earnings Preview

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After beating estimates last quarter by $0.11, American Vanguard (NYS: AVD) has set the standard for itself. The company will unveil its latest earnings on Friday, Nov. 4. American Vanguard is mainly a specialty chemical manufacturer that develops and markets safe and effective products for agricultural and commercial uses.

What analysts say:

  • Buy, sell, or hold?: Analysts are very bullish on this stock, unanimously backing it as a buy. Analysts like American Vanguard better than competitor Yongye Biotechnology International overall. Zero out of zero analysts rate Yongye Biotechnology International a buy compared to one of one for American Vanguard.
  • Revenue Forecasts: On average, analysts predict $67.3 million in revenue this quarter. That would represent a decline of 1.4% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.18 per share.

What our community says:
CAPS All-Stars are solidly behind the stock with 93.4% giving it an "outperform" rating. The community at large agrees with the All-Stars with 94.9% awarding it a rating of "outperform." Fools are bullish on American Vanguard, though the message boards have been quiet lately with only 53 posts in the past 30 days. Even with a robust four out of five stars, American Vanguard's CAPS rating falls a little short of the community's upbeat outlook.

Management:
American Vanguard's profit has risen year over year by an average of 91.7% over the past five quarters. Revenue has now gone up for three straight quarters. The company increased its gross margin by 2.9 percentage points in the last quarter. Revenue rose 54.1% while cost of sales rose 46.9% to $48.4 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. 

QuarterQ2Q1Q4Q3
Gross Margin39.8%42.0%40.9%37.2%
Operating Margin13.3%13.6%8.7%9.4%
Net Margin7.5%7.4%6.2%5.3%
One final thing: If you want to keep tabs on American Vanguard movements, and for more analysis on the company, make sure you add it to your Watchlist.

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