South Jersey Earnings Preview

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Investors never know what to expect for South Jersey Industries (NYS: SJI) , as it has wavered between topping and missing analysts' estimates during the past fiscal year. The company will unveil its latest earnings on Tuesday, Nov. 8. South Jersey Industries is an energy services holding company, which, through its subsidiaries, distributes natural gas and provides other energy-related products.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back South Jersey Industries, with five out of six rating it a buy and the remainder rating it a hold. Analysts like South Jersey Industries better than competitor New Jersey Resources overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $176.8 million in revenue this quarter. That would represent a rise of 10.1% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.06 per share. Estimates range from breaking even to a profit of $0.11.

What our community says:
CAPS All-Stars are solidly behind the stock, with 91.3% granting it an outperform rating. The community at large agrees with the All-Stars, with 87.3% assigning it a rating of outperform. Fools have embraced South Jersey Industries, though the message boards have been quiet lately, with only 28 posts in the past 30 days. Though still bullish, the CAPS rating of four out of five stars for South Jersey Industries is a bit more pessimistic than the community assessment.

Management:
South Jersey Industries' income has fallen year over year by an average of 31.5% over the past five quarters. Revenue has now gone up for three straight quarters. The company's gross margin shrank by 2.5 percentage points in the last quarter. Revenue rose 5.8% while cost of sales rose 9% to $137.1 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 and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

14.6%

26.2%

19.1%

6.9%

Net Margin

3.8%

15.5%

8.9%

0.8%

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

Motley Fool newsletter services have recommended buying shares of South Jersey Industries.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

At the time this article was published

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