CTS Earnings Preview

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CTS (NYS: CTS) will look to match Wall Street forecasts for the third consecutive quarter. The company will unveil its latest earnings on Wednesday. CTS designs, manufactures, assembles, and sells electronic components and sensors and provide electronics manufacturing services mainly to OEMs for the automotive, computer, communications, medical, industrial, and defense and aerospace markets.

What analysts say:

  • Buy, sell, or hold?: Analysts are very bullish on this stock, unanimously backing it as a buy. Analysts like CTS better than competitor Sanmina-SCI overall. Five out of 13 analysts rate Sanmina-SCI a buy compared to five of five for CTS. That rating hasn't budged in three months as analysts have remained steady in their opinion of the stock.
  • Revenue forecasts: On average, analysts predict $158.3 million in revenue this quarter. That would represent a rise of 9.1% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.23 per share. Estimates range from $0.23 to $0.24.

What our community says:
CAPS All-Stars are solidly behind the stock with 88.9% granting it an outperform rating. The community at large backs the All-Stars with 82.5% awarding it a rating of outperform. Fools are keen on CTS, though the message boards have been quiet lately with only 26 posts in the past 30 days. CTS has a bullish CAPS rating of four out of five stars that is about on par with the Fool community assessment.

Management:
CTS' income has fallen year over year by an average of 3.4% over the past five quarters. Revenue has now gone up for three straight quarters. The company's gross margin shrank by 2.7 percentage points in the last quarter. Revenue rose 4.8% while cost of sales rose 8.4% to $118.6 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.

Quarter

Q3

Q2

Q1

Q4

Gross Margin

18.8%

19%

19.2%

20.1%

Operating Margin

5.3%

3.1%

3.8%

4.1%

Net Margin

4.0%

2.8%

3.4%

3.3%

For all our CTS-specific analysis, including earnings and beyond, add CTS to My Watchlist.

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Earnings estimates provided by Zacks.

At the time this article was published

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