Lawson Products Earnings Preview

Motley Fool Staff
Updated

Investors never know what to expect for Lawson Products (NAS: LAWS) , as it has wavered between topping and missing analysts estimates during the past fiscal year. The company will unveil its latest earnings on Thursday. Lawson Products is a North American distributor of products and services to the industrial, commercial, institutional, and governmental maintenance, repair, and operations marketplace.

What analysts say:

  • Buy, sell, or hold?: Half of analysts think investors should stand pat on Lawson Products while the remaining half rate the stock as a buy. Analysts don't like Lawson Products as much as competitor DXP Enterprises overall. Four out of four analysts rate DXP Enterprises a buy compared to one of two for Lawson Products. Analysts haven't adjusted their rating of Lawson Products for the past three months.

  • Wall Street earnings expectations: The average analyst estimate is a loss of $0.13 per share. Estimates range from a loss of $0.20 to a loss of $0.06.

What our community says:
The majority of CAPS All-Stars consider Lawson a good bet, as 61.5% award it an outperform rating. The community is torn on the stock with 52.6% Fools awarding it an outperform rating and 47.4% an underperform rating. Fools feel positively about Lawson Products, though the message boards have been quiet lately with only 25 posts in the past 30 days. Though the stock has a middling CAPS rating of three out of five stars, the community sentiment is even more negative.

Management:
Revenue has fallen for the past three quarters. The company's gross margin shrank by 6.3 percentage points in the last quarter. Revenue fell 15.6% while cost of sales fell 1.2% to $32.8 million from a year earlier.

Now let's get some insight into how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. Lawson Products has seen decreasing net margins year-over-year for the last four quarters. Net margins reflect what percentage of each dollar earned by the company becomes profit. Here is how Lawson Products has been doing for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

56.5%

57.4%

60.5%

55.6%

Operating Margin

(4.1%)

1.9%

4.5%

2.2%

Net Margin

(2.9%)

1.3%

2.4%

(0.9%)

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Earnings estimates provided by Zacks.

At the time thisarticle was published

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