Home-improvement products maker Masco (NYSE:MAS) reports Q3 2007 earnings Tuesday morning. Want to know what Wall Street expects to see? Read on. Want to know what really matters? Read on a bit more.

What analysts say:

  • Buy, sell, or waffle? Thirteen analysts follow Masco, giving it four buy ratings, eight holds, and a sell.
  • Revenues. On average, the analysts expect to see sales slip 7% to $3.06 billion.
  • Earnings. Profits are predicted to fall even harder, down 25% to $0.45 per share.

What management says:
Masco updated investors on its guidance last month. Unfortunately, that guidance came in the form of an earnings warning. The long and short of things is that management expects to earn about $1.60 this year.

What management does:
Over the last 18 months, Masco's margins have headed in just one direction -- down. No surprise there. We're seeing the same trends (albeit of more recent origin) at rivals Fortune Brands (NYSE:FO) and American Woodmark (NASDAQ:AMWD), which, like Masco, produce goods for use in home improvement, and also at Home Depot (NYSE:HD), which retails their wares. About the only company trying to buck the trend is Home Depot rival Lowe's (NYSE:LOW).

Margins

3/06

6/06

9/06

12/06

3/07

6/07

Gross

28.3%

28.2%

28.1%

27.5%

27.2%

27.1%

Operating

13.0%

13.1%

12.6%

11.4%

10.9%

10.4%

Net

7.1%

6.6%

6.6%

3.8%

3.4%

3.2%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
The dividend-desiring duo over at Motley Fool Income Investor isn't overly worried about Masco's declining stock price. On the contrary, I'm betting their first thought when seeing it is: Lower price? Higher yield!

Commenting on the company's performance in the semiannual portfolio review back in June, Income Investor advisor James Early spoke approvingly of Masco's decision to promote CFO and 30-year Masco veteran Timothy Wadhams into the CEO's chair. Observing that Wadhams will be "the first non-family CEO in Masco's 78-year history," James pointed out how Wrigley's (NYSE:WWY) decision to put an outsider in charge of the company has paid off for investors, and he hopes the same concept will bring fresh growth to Masco.

What do James and co-advisor Andy Cross think of the new CEO three months into his tenure? Try out Income Investor on our dime, and see what they have to say.

What's Masco done for us lately? Find out in:

Fool contributor Rich Smith does not own shares of any company named above. Home Depot is an Inside Value pick. The Motley Fool has a disclosure policy.