WMS Industries Earnings Preview

Motley Fool Staff
Updated

WMS Industries (NYS: WMS) didn't hit the Street's expectations last quarter, but investors hope that it will rebound this quarter. The company will unveil its latest earnings on Thursday, Jan. 26. WMS Industries is engaged in serving the legalized gaming industry worldwide by designing, manufacturing, and distributing video and reel-spinning gaming machines, and video lottery terminals.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on WMS Industries with 11 of 15 analysts rating it hold. Analysts don't like WMS Industries as much as competitor Shuffle Master overall. Three out of six analysts rate Shuffle Master a buy compared to three of 15 for WMS Industries. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.

  • Revenue Forecasts: On average, analysts predict $171.6 million in revenue this quarter. That would represent a decline of 14.2% from the year-ago quarter.

  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.30 per share. Estimates range from $0.26 to $0.37.

What our community says:
CAPS All-Stars are enthusiastically backing the stock, with 88.9% assigning it an "outperform" rating. The community at large is in line with the All-Stars, with 86.5% giving it a rating of "outperform." Fools are keen on WMS Industries, though the message boards have been quiet lately with only 76 posts in the past 30 days. Despite the majority sentiment in favor of WMS Industries, the stock has a middling CAPS rating of three out of five stars.

Management:
WMS Industries' income has fallen year-over-year by an average of 43.7% over the past five quarters. Revenue has fallen for the past three quarters.

Now, a look at how efficient management has been 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 four quarters. Operating margins reflect the total sales revenue that the company retains after costs. See how WMS Industries has been doing for the last four quarters:

Quarter

Q1

Q4

Q3

Q2

Gross Margin

63.3%

57.4%

60.7%

60.6%

Operating Margin

2.2%

4.7%

18.1%

18.4%

Net Margin

2.4%

5.1%

12.6%

13.5%

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