Ralcorp Holdings Earnings Preview

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Ralcorp Holdings (NYS: RAH) came in right in line with the Street's expectations last quarter, but investors are hoping that it will beat them this quarter. The company will unveil its latest earnings on Tuesday, Nov. 8. Ralcorp Holdings is engaged in manufacturing, distributing, and marketing Post-branded cereals and store-brand food products in the grocery, mass merchandise, drug, and food service channels.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Ralcorp Holdings, with seven out of 11 rating it a buy and the remainder rating it a hold. Analysts like Ralcorp Holdings better than competitor J.M. Smucker overall. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.
  • Revenue forecasts: On average, analysts predict $1.22 billion in revenue this quarter. That would represent a rise of 8% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $1.40 per share. Estimates range from $1.30 to $1.48.

What our community says:
CAPS All-Stars are solidly behind the stock, with 94.3% awarding it an outperform rating. The community at large agrees with the All-Stars, with 92.6% granting it a rating of outperform. Fools are keen on Ralcorp Holdings, though the message boards have been quiet lately, with only 63 posts in the past 30 days. Despite the majority sentiment in favor of Ralcorp Holdings, the stock has a middling CAPS rating of three out of five stars.

Management:
Ralcorp Holdings' income has fallen year over year by an average of 2.4% 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

Q3

Q2

Q1

Q4

Gross Margin

24.7%

29%

27.1%

25.9%

Operating Margin

6.5%

14%

12.5%

-11.1%

Net Margin

2.4%

7.1%

6.1%

3.7%

One final thing: If you want to keep tabs on Ralcorp Holdings movements, and for more analysis on the company, make sure you add it to your Watchlist.

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At the time this article was published

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