Air Methods Earnings Preview

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Investors hope Air Methods (NAS: AIRM) will top analyst estimates once again after beating predictions by $0.10 in the previous quarter. The company will unveil its latest earnings on Wednesday, Nov. 9. Air Methods is a provider of air medical emergency transport services and systems throughout the United States. It also designs, manufactures, and installs medical aircraft interiors and other aerospace and medical transport products.

What analysts say:

  • Buy, sell, or hold?: The majority of analysts back Air Methods as a buy. But with 80% of analysts rating it a buy, Air Methods is still below the mean analyst rating of its nearest 10 competitors, which average 88.9% buys. Analysts don't like Air Methods as much as competitor U.S. Physical Therapy overall. Six out of six analysts rate U.S. Physical Therapy a buy compared to four of five for Air Methods. 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 $191.3 million in revenue this quarter. That would represent a rise of 24.3% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $1.35 per share. Estimates range from $1.33 to $1.38.

What our community says:
CAPS All-Stars are solidly backing the stock with 93.8% giving it an "outperform" rating. The community at large backs the All-Stars with 91.9% granting it a rating of "outperform." Fools are bullish on Air Methods, though the message boards have been quiet lately with only 59 posts in the past 30 days. Despite the majority sentiment in favor of Air Methods, the stock has a middling CAPS rating of three out of five stars.

Management:
Revenue has now gone up for three straight quarters. The company's gross margin shrank by 3.6 percentage points in the last quarter. Revenue rose 7.9% while cost of sales rose 13.6% to $106.2 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 Margin29.3%27.0%31.9%34.3%
Operating Margin12.1%8.1%14.9%19.0%
Net Margin6.7%4.5%8.4%12.1%
One final thing: If you want to keep tabs on Air Methods movements, and for more analysis on the company, make sure you add it to your Watchlist.

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