Intrepid Potash Earnings Preview

Intrepid Potash (NYSE: IPI  ) hasn't been able to establish an earnings trend, bouncing between beating and falling short of estimates during the past fiscal year. The company will unveil its latest earnings on Wednesday, Nov. 2. Intrepid Potash and its subsidiaries produce muriate of potash, langbeinite, and by-products including salt, magnesium chloride, and metal recovery salts.

What analysts say:

• Buy, sell, or hold?: Half of analysts think investors should stand pat on Intrepid Potash while the remaining half are split between buy and sell. Analysts like Intrepid Potash better than competitor Compass Minerals International overall. Zero out of five analysts rate Compass Minerals International a buy compared to two of eight for Intrepid Potash. Analysts still rate the stock a moderate sell, but they are a bit more wary about it compared to three months ago.
• Revenue forecasts: On average, analysts predict $106.9 million in revenue this quarter. That would represent a rise of 27.8% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.36 per share. Estimates range from $0.32 to $0.38.

What our community says:
CAPS All-Stars are solidly behind the stock with 94.7% assigning it an "outperform" rating. The community at large concurs with the All-Stars with 96% granting it a rating of "outperform." Fools are keen on Intrepid Potash and haven't been shy with their opinions lately, logging 263 posts in the past 30 days. Even with a robust four out of five stars, Intrepid Potash's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Intrepid Potash's profit has risen year over year by an average of more than threefold over the past five quarters. The company upped its gross margin by 23.3 percentage points in the last quarter. Revenue rose 85.6% while cost of sales rose 29.6% to $64.2 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	Q2	Q1	Q4	Q3
Gross Margin	46.2%	39.3%	39.2%	29.3%
Operating Margin	42.5%	44.4%	30.4%	21.8%
Net Margin	25.7%	26.9%	18.9%	12.7%

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