OM Group Earnings Preview

Motley Fool Staff
Updated

OM Group (NYS: OMG) will try to beat its earnings estimates for the fifth consecutive quarter. The company will unveil its latest earnings on Thursday, August 4. OM Group is a global developer, producer, and marketer of value-added specialty chemicals and advanced materials which are essential to complex chemical and industrial processes.

What analysts say:

  • Buy, sell, or hold?: Half of analysts think investors should stand pat on OM Group while the remaining half rate the stock as a buy. Analysts don't like OM Group as much as competitor Koppers Holdings overall. Five out of six analysts rate Koppers Holdings a buy compared to one of two for OM Group. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.

  • Revenue Forecasts: On average, analysts predict $343.9 million in revenue this quarter. That would represent a rise of 13.5% from the year-ago quarter.

  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.77 per share. Estimates range from $0.74 to $0.81.

What our community says:
CAPS All Stars are solidly backing the stock, with 98.5% giving it an "outperform" rating. The community at large agrees with the All Stars, with 94.3% granting it a rating of "outperform." Fools have embraced OM Group and haven't been shy with their opinions lately, logging 125 posts in the past 30 days. OM Group has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
OM Group's profit has risen year over year by an average of 19.3%. 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 following table shows gross, operating, and net margins over the past four quarters:

Quarter

Q1

Q4

Q3

Q2

Gross Margin

24.8%

24.1%

25.0%

22.4%

Operating Margin

11.4%

8.7%

11.7%

10.0%

Net Margin

9.3%

8.1%

8.1%

4.2%

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

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At the time thisarticle was published

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