Symmetry Medical Earnings Preview

While Symmetry Medical (NYSE: SMA  ) 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. Symmetry Medical is an independent provider of implants, related instruments, and cases to global orthopedic device manufacturers.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Symmetry Medical, with four of five rating it a buy and the remainder rating it a hold. Analysts like Symmetry Medical better than competitor RTI Biologics 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 $80.8 million in revenue this quarter. That would represent a decline of 15.8% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.04 per share. Estimates range from $0.03 to $0.07.

What our community says:
CAPS All Stars are strongly backing the stock, with 87% assigning it an "outperform" rating. Most of the community backs the All Stars, with 89.5% giving it a rating of "outperform." Despite the majority sentiment in favor of Symmetry Medical, the stock has a middling CAPS rating of three out of five stars.

Management:
A year-over-year revenue decrease last quarter snaps a streak of three consecutive quarters of revenue increases. The company's gross margin shrank by 2.9 percentage points in the last quarter. Revenue fell 8.2%, while cost of sales fell 4.8% to $68.3 million from a year earlier.

Now let's look at how efficiently management is running the business. Margins are a representation of how efficiently a company captures portions of sales dollars. Symmetry Medical has seen a slipping net margin year-over-year for the last three quarters. Net margin reflects what percentage of each dollar earned by the company becomes profit. See how Symmetry Medical has been doing for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

18.7%

23.5%

20.2%

23.4%

Operating Margin

2%

7.9%

3.3%

9.4%

Net Margin

0.6%

4.4%

1.4%

4.5%

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Earnings estimates provided by Zacks.

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