Federal Signal Earnings Preview

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Investors braced for a bumpy ride ahead of Federal Signal's (NYS: FSS) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Wednesday, March 14. Federal Signal designs and manufactures a suite of products and integrated solutions for municipal, governmental, industrial, and commercial customers.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Federal Signal, with analysts unanimously rating it a hold. 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 $202.2 million in revenue this quarter. That would represent a rise of 8.3% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.05 per share.

What our community says:
CAPS All-Stars are in strong support of the stock, with 90.5% giving it an outperform rating. The greater community agrees with the All-Stars, as 81% give it a rating of outperform. Federal Signal's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
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. Federal Signal's gross margins, which reflect the total sales revenue retained after costs, have been dropping year over year for the last four quarters. Here is how Federal Signal has been doing for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

23.8%

25.3%

23.9%

24.2%

Operating Margin

3.8%

4.4%

(0.7%)

(48.2%)

Net Margin

0.9%

2.9%

(3.1%)

(97.1%)

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Earnings estimates provided by Zacks.

At the time this article was published

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