Arch Chemicals Earnings Preview

Updated

While Arch Chemicals (NYS: ARJ) missed estimates last quarter, investors hope that it will bounce back and outpace Wall Street expectations this quarter. The company will unveil its latest earnings Friday. Arch Chemicals is a global biocides company.

What analysts say:

What our community says:
CAPS All-Stars are solidly behind the stock with 100% granting it an "outperform" rating. The community at large backs the All-Stars with 91.7% assigning it a rating of "outperform." Fools are gung-ho about Arch Chemicals, though the message boards have been quiet lately with only 27 posts in the past 30 days. Arch Chemicals has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
Arch Chemicals' profit has risen year over year by an average of 39.9%. A year-over-year revenue increase last quarter snaps a streak of two consecutive quarters of revenue declines. Revenue rose 9% in the first quarter and fell 6.5% in the fourth quarter of the last fiscal year and 7.1% in the third quarter of the last fiscal year.

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

27.6%

28.9%

30.1%

34.1%

Operating Margin

3.5%

2.0%

5.5%

14.9%

Net Margin

3.6%

2.0%

2.8%

9.9%

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At the time thisarticle was published

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