Carpenter Technology Earnings Preview

Carpenter Technology (NYSE: CRS  ) will try to beat its earnings estimates for the third consecutive quarter. The company will unveil its latest earnings on Thursday, Jan. 26. Carpenter Technology is engaged in the manufacturing, fabrication, and distribution of specialty metals. It is organized in two reportable business segments: advanced metals operations and premium alloys operations.

What analysts say:

• Buy, sell, or hold?: Analysts strongly back Carpenter Technology, with five out of six rating it a buy and the remainder rating it a hold. Analysts like Carpenter Technology better than competitor Commercial Metals Company overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
• Revenue forecasts: On average, analysts predict $434.9 million in revenue this quarter. That would represent a rise of 15.8% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.51 per share. Estimates range from $0.48 to $0.56.

What our community says:
CAPS All-Stars are solidly backing the stock, with 98.1% giving it an outperform rating. The community at large concurs with the All-Stars, with 93.7% assigning it a rating of outperform. Fools are keen on Carpenter Technology and haven't been shy with their opinions lately, logging 130 posts in the past 30 days. Even with a robust four out of five stars, Carpenter Technology's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Carpenter Technology's profit has risen year over year by an average of more than fivefold over the past five quarters. The company increased its gross margin by 5.4 percentage points in the last quarter. Revenue rose 17.7% while cost of sales rose 10.3% to $333 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	19.6%	15.9%	15.7%	13.1%
Operating Margin	10.6%	7.2%	7.6%	3.2%
Net Margin	5.7%	5.3%	6.2%	2.5%

We can help you keep tabs on your companies with My Watchlist, our free, personalized service. Add Carpenter Technology now.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Earnings estimates provided by Zacks.