Materion Earnings Preview

After beating estimates last quarter by $0.01, Materion (NYSE: MTRN  ) has set the standard for itself. The company will unveil its latest earnings on Monday, Feb. 27. Materion, through its subsidiaries, manufactures engineered materials serving the global telecommunications and computer, data storage, aerospace and defense, and automotive electronics industries.

What analysts say:

  • Buy, sell, or hold?: Analysts are very bullish on this stock, unanimously backing it as a buy. 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 $353.5 million in revenue this quarter. That would represent a decline of 0.7% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.12 per share. Estimates range from $0.06 to $0.29.

What our community says:
CAPS All-Stars are strongly backing the stock, with 96.5% awarding it an "outperform" rating. The community at large agrees with the All-Stars, with 93% granting it a rating of "outperform." Even with a robust four out of five stars, Materion's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Materion's income has fallen year over year by an average of 94.4% over the past five quarters. The company's gross margin shrank by 3.3 percentage points in the last quarter. Revenue rose 20.7% while cost of sales rose 25.6% to $335.4 million from a year earlier.

Now let's get some insight into how efficient management is at running the business. Traditionally, margins serve as an illustration of how efficiently a company captures portions of sales dollars. Materion's gross margin has decreased year over year for the last three quarters. Gross margin reflects the total sales revenue retained after costs. Here is how Materion has been doing for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

14.6%

14.8%

14.9%

16.6%

Operating Margin

4.4%

4.9%

4.8%

5.3%

Net Margin

3.4%

3.3%

3.2%

3.5%

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Earnings estimates provided by Zacks.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 22, 2012, at 4:30 PM, pfxg99 wrote:

    Materion's true margins are much higher than their reported margins because of all the precious metals they use in their products. Strip our those pass-through costs and gross margin is around 40%, according to the company.

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Related Tickers

7/29/2014 4:00 PM
MTRN $32.86 Down +0.00 +0.00%
Materion Corp. CAPS Rating: *****

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