Buckeye Technologies Earnings Preview

Investors are on the edge of their collective seats, hoping that Buckeye Technologies (NYSE: BKI  ) will top analyst expectations for the third consecutive quarter. The company will unveil its latest earnings Tuesday. Buckeye Technologies is a producer of value-added cellulose-based specialty products.

What analysts say:

• Buy, sell, or hold?: Analysts strongly back Buckeye Technologies, with two of three rating it a buy and the remainder rating it a hold. Analysts don't like Buckeye Technologies as much as competitor Clearwater Paper overall. Analysts haven't adjusted their rating of Buckeye Technologies for the past three months.
• Revenue forecasts: On average, analysts predict $243.4 million in revenue this quarter. That would represent a rise of 18.7% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.72 per share. Estimates range from $0.70 to $0.73.

What our community says:
CAPS All-Stars are solidly backing the stock with 100% giving it an "outperform" rating. The community at large concurs with the All-Stars with 95.6% awarding it a rating of "outperform." Fools are bullish on Buckeye Technologies, though the message boards have been quiet lately with only 53 posts in the past 30 days. Even with a robust four out of five stars, Buckeye Technologies' CAPS rating falls a little short of the community's upbeat outlook.

Management:
Buckeye Technologies' income has fallen year over year by an average of 7.4%. The company raised its gross margin by 6.8 percentage points in the last quarter. Revenue rose 24.7% while cost of sales rose 14.4% to $180.3 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.

Quarter	Q3	Q2	Q1	Q4
Gross Margin	24.2%	21.2%	18.0%	16.2%
Operating Margin	18.5%	15.1%	11.7%	9.3%
Net Margin	12.1%	8.1%	31.9%	4.7%

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