Cambrex Earnings Preview

Cambrex (NYSE: CBM  ) hasn't been able to establish an earnings trend, bouncing between beating and falling short of estimates during the past fiscal year. The company will unveil its latest earnings on Tuesday, August 2. Cambrex is a life sciences company that provides essential products and services to accelerate drug discovery, development, and manufacturing processes for human therapeutics.

What analysts say:

• Buy, sell, or hold?: Analysts think investors should stand pat on Cambrex, unanimously rating it hold. Analysts don't like Cambrex as much as competitor Aceto overall. One out of one analysts rate Aceto a buy compared to zero of two for Cambrex. Analysts' rating of Cambrex has stayed constant from three months prior.
• Revenue Forecasts: On average, analysts predict $62.1 million in revenue this quarter. That would represent a rise of 6.7% from the year-ago quarter.
• Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.13 per share. Estimates range from $0.11 to $0.14.

What our community says:
CAPS All Stars are solidly behind the stock, with 87.5% assigning it an "outperform" rating. The community at large concurs with the All Stars, with 75.8% giving it a rating of "outperform." Fools are bullish on Cambrex, though the message boards have been quiet lately with only 20 posts in the past 30 days. Cambrex's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
The company's revenue has now risen for two straight quarters. The company raised its gross margin by three percentage points in the last quarter. Revenue rose 8% while cost of sales rose 3.7% to $43.1 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	Q1	Q4	Q3	Q2
Gross Margin	28.8%	31.3%	29.5%	30.8%
Operating Margin	8.8%	12.9%	2.6%	11.9%
Net Margin	4.5%	7.2%	(3%)	8.2%

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