RTI International Metals Earnings Preview

Investors are bracing for the worst and waiting to see if RTI International Metals (NYSE: RTI  ) will fall short of Wall Street forecasts for the consecutive quarter. The company will unveil its latest earnings on Tuesday. RTI International Metals is a producer and global supplier of titanium mill products and a manufacturer of fabricated titanium and specialty metal components for the international aerospace, defense, energy, and industrial and consumer markets.

What analysts say:

• Buy, sell, or hold?: Analysts think investors should stand pat on RTI International Metals with five of seven analysts rating it hold. Analysts don't like RTI International Metals as much as competitor China Direct overall. One out of one analysts rate China Direct a buy compared to two of seven for RTI International Metals. Analysts still rate the stock a hold, but they are a bit more wary about it compared to three months ago.
• Revenue forecasts: On average, analysts predict $122.9 million in revenue this quarter. That would represent a rise of 15.2% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.04 per share. Estimates range from a loss of $0.05 to a profit of $0.12.

What our community says:
CAPS All-Stars are solidly behind the stock with 97.7% awarding it an "outperform" rating. The community at large backs the All-Stars with 92.9% granting it a rating of "outperform." Fools have embraced RTI International Metals and haven't been shy with their opinions lately, logging 109 posts in the past 30 days. RTI International Metals has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
Revenue has now gone up for three straight quarters. The company's gross margin shrank by four percentage points in the last quarter. Revenue rose 12% while cost of sales rose 18% to $94.8 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	21.5%	15.0%	13.8%	15.9%
Operating Margin	7.8%	2.2%	(2.2%)	2.0%
Net Margin	1.9%	(1.3%)	(16.4%)	9.6%

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