TreeHouse Earnings Preview

TreeHouse (NYSE: THS  ) didn't hit the Street's expectations last quarter, but investors hope it will rebound this quarter. The company will unveil its latest earnings on Thursday. Treehouse Foods is a food manufacturer servicing mainly the retail grocery and food service distribution channels.

What analysts say

• Buy, sell, or hold?: Analysts think investors should stand pat on TreeHouse with seven of 13 analysts rating it hold. Analysts like TreeHouse better than competitor Lancaster Colony overall. Zero out of four analysts rate Lancaster Colony a buy compared to six of 13 for TreeHouse. 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 $489.9 million in revenue this quarter. That would represent a rise of 9.8% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.43 per share. Estimates range from $0.42 to $0.44.

What our community says
CAPS All-Stars are solidly backing the stock with 93.3% assigning it an outperform rating. The community at large agrees with the All Stars with 90.7% giving it a rating of outperform. Fools have embraced TreeHouse, though the message boards have been quiet lately with only 45 posts in the past 30 days. Despite the majority sentiment in favor of TreeHouse, the stock has a middling CAPS rating of three out of five stars.

Management
TreeHouse's profit has risen year over year by an average of 13.7%. The company boosted its gross margin by 2.1 percentage points in the last quarter. Revenue rose 24.3% while cost of sales rose 20.8% to $372.6 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	24.5%	24.8%	23.7%	23.8%
Operating Margin	9.1%	11.1%	10.3%	9.2%
Net Margin	4.0%	5.5%	5.4%	4.9%

One final thing: If you want to keep tabs on TreeHouse movements, and for more analysis on the company, make sure you add it to your watchlist.

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