Pulse Electronics Earnings Preview

Motley Fool Staff
Updated

Pulse Electronics (NYS: PULS) will try to beat its earnings estimates for the fifth consecutive quarter. The company will unveil its latest earnings on Monday. Pulse Electronics is a producer of precision-engineered electronic components and modules.

What analysts say:

  • Buy, sell, or hold?: Half of analysts think investors should stand pat on Pulse Electronics while the remaining half rate the stock as a buy Half of analysts think investors should stand pat on Pulse Electronics. Analysts don't like Pulse Electronics as much as competitor KEMET overall. Four out of six analysts rate KEMET a buy compared to one of two for Pulse Electronics. That rating hasn't budged in three months as analysts have remained steadfast in their opinion of the stock.

  • Revenue forecasts: On average, analysts predict $92 million in revenue this quarter. That would represent a decline of 9.1% from the year-ago quarter.

  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.01 per share.

What our community says:
CAPS All-Stars are enthusiastically backing the stock, with 92.4% assigning it an outperform rating. The greater community agrees with the All-Stars, as 93.5% give it a rating of outperform. Despite the majority sentiment in favor of Pulse Electronics, the stock has a middling CAPS rating of three out of five stars.

Management:
Revenue has fallen for the past three quarters. The company's gross margin shrank by 4.1 percentage points in the last quarter. Revenue fell 21.3% while cost of sales fell 16.9% to $73.9 million from a year earlier.

Now let's get some insight into how efficient management is at running the business. Traditionally, margins serve as an illustration of how efficiently a company captures portions of sales dollars. Pulse Electronics has seen decreasing gross margins year-over-year for the last four quarters. Gross margins reflect the total sales revenue retained after costs. Here are Pulse Electronics' reported margins for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

23.0%

23.6%

20.9%

24.8%

Operating Margin

(0.7%)

(4.5%)

(11.7%)

4.1%

Net Margin

(1.2%)

(4.8%)

(5.0%)

1.2%

One final thing: If you want to keep tabs on Pulse Electronics movements, and for more analysis on the company, make sure you add it to your watchlist.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Earnings estimates provided by Zacks.

At the time thisarticle was published

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement