Great Plains Energy Earnings Preview

Investors are braced for a bumpy ride ahead of Great Plains Energy's (NYSE: GXP  ) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings Friday. Great Plains Energy is a public utility holding company that operates through its four direct subsidiaries: Kansas City Power and Light, KLT, Innovative Energy Consultants, and Great Plains Energy Services.

What analysts say:

• Buy, sell, or hold?: Analysts strongly back Great Plains Energy, with five of eight rating it a buy and the remainder rating it a hold. Analysts like Great Plains Energy better than competitor Westar Energy overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared with three months ago.
• Revenue Forecasts: On average, analysts predict $559.9 million in revenue this quarter. That would represent a rise of 1.4% from the year-ago quarter.
• Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.34 per share. Estimates range from $0.29 to $0.39.

What our community says:
CAPS All-Stars are solidly backing the stock with 92.9% giving it an "outperform" rating. The community at large agrees with the All-Stars with 89.9% awarding it a rating of "outperform." Fools have embraced Great Plains Energy, though the message boards have been quiet lately with only 70 posts in the past 30 days. Despite the majority sentiment in favor of Great Plains Energy, the stock has a middling CAPS rating of three out of five stars.

Management:
Revenue has fallen in the past two quarters. The company's gross margin shrank by 2.4 percentage points in the last quarter. Revenue fell 2.8% while cost of sales rose 0.9% to $327.6 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 and net margins over the past four quarters.

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