CARBO Ceramics Earnings Preview

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CARBO Ceramics (NYS: CRR) will try to beat its earnings estimates for the fifth consecutive quarter. The company will unveil its latest earnings on Thursday, Jan. 26. CARBO Ceramics is a supplier of ceramic proppant, the provider of the world's most popular fracture simulation software, and a provider of fracture design, engineering, and consulting services.

What analysts say:

  • Buy, sell, or hold?: The majority of analysts back CARBO Ceramics as a buy. But with 55.6% of analysts rating it a buy, CARBO Ceramics is still below the mean analyst rating of its nearest four competitors, which average 64.7% buys. Analysts don't like CARBO Ceramics as much as competitor Flotek Industries overall. Three out of three analysts rate Flotek Industries a buy compared to five of nine for CARBO Ceramics. Analysts still rate the stock a hold, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $179.2 million in revenue this quarter. That would represent a rise of 49.9% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $1.73 per share. Estimates range from $1.62 to $1.83.

What our community says:
CAPS All-Stars are solidly backing the stock with 92.4% giving it an "outperform" rating. The community at large concurs with the All-Stars with 93% awarding it a rating of "outperform." Fools are gung-ho about CARBO Ceramics and haven't been shy with their opinions lately, logging 121 posts in the past 30 days. Despite the majority sentiment in favor of CARBO Ceramics, the stock has a middling CAPS rating of three out of five stars.

Management:
CARBO Ceramics' profit has risen year over year by an average of 66.7% over the past five quarters. The company raised its gross margin by six percentage points in the last quarter. Revenue rose 41% while cost of sales rose 27.5% to $94.4 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

43.5%

41.5%

41.1%

38.8%

Operating Margin

33.5%

30.9%

30.6%

25.8%

Net Margin

22.1%

20.0%

20.0%

17.4%

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

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Earnings estimates provided by Zacks.

At the time this article was published

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