Brady Earnings Preview

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Brady (NYS: BRC) hasn't been able to establish an earnings trend, bouncing between beating and falling short of estimates during the past fiscal year. The company will unveil its latest earnings on Thursday, Feb. 16. Brady is an international manufacturer and marketer of identification solutions and products which identify and protect premises, products, and people.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Brady with five of seven analysts rating it hold. Analysts don't like Brady as much as competitor Checkpoint Systems overall. Two out of two analysts rate Checkpoint Systems a buy compared to two of seven for Brady.
  • Revenue Forecasts: On average, analysts predict $330.7 million in revenue this quarter. That would represent a rise of 0.5% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.49 per share. Estimates range from $0.43 to $0.53.

What our community says:
CAPS All-Stars are strongly supporting the stock, with 96.4% assigning it an "outperform" rating. The community at large backs the All-Stars, with 93.5% giving it a rating of "outperform." Fools are bullish on Brady, though the message boards have been quiet lately with only 42 posts in the past 30 days. Even with a robust four out of five stars, Brady's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Brady's profit has risen year-over-year by an average of 35.9% over the past five quarters. Revenue has now gone up for three straight 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 company's net margins have been increasing year-over-year for the last four quarters. Net margins reflect what percentage of revenue becomes profit. See how Brady has been doing for the last four quarters:

Quarter

Q1

Q4

Q3

Q2

Gross Margin

48.0%

48.1%

49.6%

48.3%

Operating Margin

14.0%

12.4%

12.1%

11.3%

Net Margin

9.4%

8.6%

8.5%

7.4%

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