Quanex Building Products Earnings Preview

While Quanex Building Products (NYSE: NX  ) missed estimates last quarter, investors hope that it will bounce back and outpace Wall Street expectations this quarter. The company will unveil its latest earnings on Thursday, Feb. 23. Quanex Building Products manufactures aluminum flat-rolled products, flexible insulating glass spacer systems, thin-film solar panel sealants, extruded plastic profiles, and precision-formed metal and wood products.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Quanex Building Products with five of eight analysts rating it hold. Analysts don't like Quanex Building Products as much as competitor NCI Building Systems overall. One out of two analysts rate NCI Building Systems a buy compared to three of eight for Quanex Building Products. Quanex Building Products' rating hasn't changed over the past three months.
  • Revenue forecasts: On average, analysts predict $182.9 million in revenue this quarter. That would represent a rise of 14.4% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is a loss of $0.03 per share. Estimates range from a loss of $0.10 to a profit of $0.01.

What our community says:
CAPS All-Stars are solidly behind the stock, with 95.9% giving it an "outperform" rating. The community at large backs the All-Stars, with 85.5% awarding it a rating of "outperform." Despite the majority sentiment in favor of Quanex Building Products, 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. Margins illustrate how efficiently a company captures portions of sales dollars. Quanex Building Products has seen slipping net margin year over year for the last four quarters. Net margin reflects what percentage of each dollar earned by the company becomes profit. Here is how Quanex Building Products has been doing for the last four quarters:

Quarter

Q4

Q3

Q2

Q1

Gross Margin

19.6%

16.9%

13.6%

12.6%

Operating Margin

5.1%

5.8%

(1.1%)

(4.8%)

Net Margin

2.7%

3.6%

(0.7%)

(3.0%)

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Earnings estimates provided by Zacks.

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  • Report this Comment On March 06, 2012, at 1:37 PM, nacnad wrote:

    One of the reasons Quanex failed to meet shareholders expectations is due to the fact that two of it's manufacturing plants in Davenport Iowa ( per the Quanex.com website) have been engaged in a labor strike since January 20th 2012. The company says that negotiations are ongoing but the reality is If the housing market rebounds as many investors think it should,will Quanex be on the outside looking in? Think Spring!

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