tw telecom Earnings Preview

tw telecom (Nasdaq: TWTC  ) only managed to meet estimates last quarter, but investors hope that it will surpass expectations this quarter. The company will unveil its latest earnings on Tuesday, August 9. TWTC is a national provider of managed network services specializing in ethernet and data networking, Internet access, local and long distance voice, VPN, VoIP, and network security services.

What analysts say:

• Buy, sell, or hold?: Analysts think investors should stand pat on tw telecom, with nine of 17 analysts rating it hold. Analysts like tw telecom better than competitor Level 3 Communications overall. Two out of 12 analysts rate Level 3 Communications a buy compared to eight of 17 for tw telecom. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
• Revenue Forecasts: On average, analysts predict $338.5 million in revenue this quarter. That would represent a rise of 6.8% from the year-ago quarter.
• Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.09 per share. Estimates range from $0.07 to $0.11.

What our community says:
CAPS All Stars are solidly backing the stock, with 83.8% granting it an "outperform" rating. The community at large agrees with the All Stars, with 78.2% assigning it a rating of "outperform." Fools are keen on tw telecom, though the message boards have been quiet lately with only 43 posts in the past 30 days. Despite the majority sentiment in favor of tw telecom, the stock has a middling CAPS rating of three out of five stars.

Management:
Revenue has now gone up for three straight quarters.

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:

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