CSG Systems International Earnings Preview

CSG Systems International (Nasdaq: CSGS  ) will try to beat its earnings estimates for the fourth consecutive quarter. The company will unveil its latest earnings Tuesday. CSG Systems International is a provider of software- and services-based customer interaction management solutions that help its clients build commerce by better engaging with their customers.

What analysts say:

• Buy, sell, or hold?: Analysts think investors should stand pat on CSG Systems International with four of six analysts rating it hold. Analysts like CSG Systems International better than competitor Openwave Systems overall. Two out of seven analysts rate Openwave Systems a buy compared with two of six for CSG Systems International. Analysts' rating of CSG Systems International has stayed constant from three months prior.
• Revenue forecasts: On average, analysts predict $186.5 million in revenue this quarter. That would represent a rise of 42% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.49 per share. Estimates range from $0.48 to $0.51.

What our community says:
CAPS All-Stars are solidly behind the stock with 94.1% giving it an "outperform" rating. The community at large concurs with the All-Stars with 92.4% granting it a rating of "outperform." Fools have embraced CSG Systems International, though the message boards have been quiet lately with only 47 posts in the past 30 days. Despite the majority sentiment in favor of CSG Systems International, the stock has a middling CAPS rating of three out of five stars.

Management:
Revenue has now gone up for three straight quarters. The company boosted its gross margin by 6.4 percentage points in the last quarter. Revenue rose 40.6% while cost of sales rose 24.4% to $90.8 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	50.4%	51.8%	49.3%	43.0%
Operating Margin	13.2%	13.4%	16.8%	11.2%
Net Margin	6.3%	(1.2%)	8.7%	8.7%

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