Eagle Materials Earnings Preview

Motley Fool Staff
Updated

Investors never know what to expect for Eagle Materials (NYS: EXP) , as it has wavered between topping and missing analysts estimates during the past fiscal year. The company will unveil its latest earnings on Thursday, Oct. 27. Eagle Materials is a diversified producer of basic building materials and construction products used in residential, industrial, commercial, and infrastructure construction.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Eagle Materials, with 11 out of 13 analysts rating it hold. Analysts like Eagle Materials better than competitor Texas Industries overall. One out of nine analysts rate Texas Industries a buy compared to two out of 13 for Eagle Materials.

  • Revenue forecasts: On average, analysts predict $139.4 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 earnings of $0.17 per share. Estimates range from $0.11 to $0.22.

What our community says:
CAPS All-Stars are solidly backing the stock, with 93.3% assigning it an outperform rating. The community at large backs the All-Stars, with 92.2% giving it a rating of outperform. Fools are keen on Eagle Materials and haven't been shy with their opinions lately, logging 190 posts in the past 30 days. Eagle Materials' bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Revenue has fallen for the past three quarters. The company's gross margin shrank by 6.4 percentage points in the last quarter. Revenue fell 8.4% while cost of sales fell 1.7% to $112.4 million from a year earlier.

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

6.2%

(2.4%)

7.5%

10.3%

Operating Margin

2.7%

(27.1%)

10.9%

6.9%

Net Margin

2.6%

(11.3%)

5.3%

7.3%

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At the time thisarticle was published

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