Kaydon Earnings Preview

Investors hope Kaydon (NYSE: KDN  ) will top analyst estimates once again after beating predictions by $0.02 in the previous quarter. The company will unveil its latest earnings on Friday. Kaydon is a designer and manufacturer of custom-engineered, performance-critical products supplying a diverse customer base.

What analysts say

• Buy, sell, or hold?: Analysts strongly back Kaydon, with four of seven rating it a buy and the remainder rating it a hold. Analysts like Kaydon better than competitor Barnes Group overall. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.
• Revenue forecasts: On average, analysts predict $120.1 million in revenue this quarter. That would represent a decline of 1.2% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.46 per share. Estimates range from $0.41 to $0.52.

What our community says
CAPS All-Stars are solidly behind the stock with 100% granting it an outperform rating. The community at large concurs with the All-Stars with 98.2% awarding it a rating of outperform. Fools are gung-ho about Kaydon and haven't been shy with their opinions lately, logging 101 posts in the past 30 days. Kaydon has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management
Kaydon's profit has risen year over year by an average of 20.1%. Revenue has fallen for the past three quarters.

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	35.8%	36.7%	32.5%	37.8%
Operating Margin	16.2%	16.3%	15.7%	21.6%
Net Margin	11.1%	10.8%	11.1%	14.7%

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