Clearwater Paper Earnings Preview

Investors braced for a bumpy ride ahead of Clearwater Paper's (NYSE: CLW  ) earnings announcement, as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings Thursday. Clearwater Paper is a producer of private label tissue and paperboard products in the United States.

What analysts say:

• Buy, sell, or hold?: The majority of analysts back Clearwater Paper as a buy. But with 75% of analysts rating it a buy, Clearwater Paper is still below the mean analyst rating of its nearest 10 competitors, which average 76.9% buys. Analysts like Clearwater Paper better than competitor KapStone Paper and Packaging overall. Three out of five analysts rate KapStone Paper and Packaging a buy compared with three of four for Clearwater Paper. Analysts' rating of Clearwater Paper has stayed constant from three months prior.
• Revenue forecasts: On average, analysts predict $480.1 million in revenue this quarter. That would represent a rise of 39.6% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $1.62 per share. Estimates range from $1.30 to $1.93.

What our community says:
CAPS All-Stars are solidly backing the stock, with 100% granting it an "outperform" rating. The community at large concurs with the All-Stars, with 84.8% giving it a rating of "outperform." Fools have embraced Clearwater Paper, though the message boards have been quiet lately with only 40 posts in the past 30 days. The CAPS rating of five out of five stars for Clearwater Paper is far more upbeat than the community assessment.

Management:
Clearwater Paper's profit has risen year over year by an average of more than threefold. Revenue has now gone up for three straight quarters. The company raised its gross margin by 2.3 percentage points in the last quarter. Revenue rose 40.9% while cost of sales rose 37.4% to $414.9 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. 

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