Texas Industries Earnings Preview

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Investors are bracing for the worst and waiting to see if Texas Industries (NYS: TXI) will fall short of Wall Street forecasts for the third consecutive quarter. The company will unveil its latest earnings on Thursday. Texas Industries is a supplier of heavy construction materials in the United States.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Texas Industries with seven of 10 analysts rating it hold. Analysts don't like Texas Industries as much as competitor Eagle Materials overall. Two out of 13 analysts rate Eagle Materials a buy compared to one of 10 for Texas Industries. That rating hasn't budged in three months as analysts have remained unchanged in their opinion of the stock.
  • Revenue forecasts: On average, analysts predict $132.7 million in revenue this quarter. That would represent a rise of 5.5% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is a loss of $0.82 per share. Estimates range from a loss of $0.97 to a loss of $0.65.

What our community says:
CAPS All-Stars are enthusiastically backing the stock, with 82.9% awarding it an outperform rating. The greater community is in line with the All-Stars, as 81.9% give it a rating of outperform. Texas Industries' bearish CAPS rating of one out of five stars falls short of the Fool community sentiment.


Management:
The company's revenue has now risen for two straight quarters. The company's gross margin shrank by 6.4 percentage points in the last quarter. Revenue rose 5.4% while cost of sales rose 12.7% to $153.3 million from a year earlier.

Now let's look at how efficient management is at running the business. Margins illustrate how efficiently a company captures portions of sales dollars. The company's operating margins have been decreasing year-over-year for the last three quarters. Operating margins reflect the total sales revenue that the company retains after costs. Here are Texas Industries' reported margins for the last four quarters:

Quarter

Q2

Q1

Q4

Q3

Gross Margin

1.8%

7.6%

3.7%

(7.4%)

Operating Margin

(9.2%)

(2.2%)

(10.2%)

(21.2%)

Net Margin

(13.5%)

(4.1%)

(5.2%)

(16.6%)

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

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Earnings estimates provided by Zacks.

At the time this article was published

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