Alexander & Baldwin Earnings Preview

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Alexander & Baldwin (NYS: ALEX) hasn't been able to establish an earnings trend, bouncing between beating and falling short of estimates during the past fiscal year. The company will unveil its latest earnings on Tuesday, Nov. 8. Alexander & Baldwin, through its subsidiaries, is engaged in transportation, real estate, and agribusiness operations mainly in Hawaii.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Alexander & Baldwin with analysts unanimously rating it hold. Analysts don't like Alexander & Baldwin as much as competitor Seaspan overall. Six out of eight analysts rate Seaspan a buy compared to zero of two for Alexander & Baldwin. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $504.1 million in revenue this quarter. That would represent a rise of 13.5% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.19 per share. Estimates range from $0.12 to $0.25.

What our community says:
CAPS All-Stars are solidly backing the stock with 88.5% awarding it an "outperform" rating. The community at large agrees with the All-Stars with 88.1% giving it a rating of "outperform." Fools have embraced Alexander & Baldwin, though the message boards have been quiet lately with only 52 posts in the past 30 days. The bullish CAPS rating of five out of five stars for Alexander & Baldwin outpaces Fool enthusiasm for the company.

Management:
Alexander & Baldwin's profit has risen year over year by an average of 24.5% over the past five quarters. The company's gross margin shrank by 6.9 percentage points in the last quarter. Revenue rose 22.4% while cost of sales rose 32.9% to $424.8 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 Margin13.0%10.0%12.2%18.5%
Operating Margin5.2%0.7%3.1%9.4%
Net Margin3.8%1.3%4.4%5.8%
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