Tomorrow's the big day for investors in engine- and generator-maker Briggs & Stratton (NYSE:BGG). The company reports on its fiscal second-quarter 2006 earnings sometime before 10 a.m. By noon, investors will likely be crying into their carburetors.

We don't yet know whether tomorrow's news is as bad as the analysts predict. But we can confidently say that that it won't be good. At last report, the half-dozen analysts following the company agreed that it would report strong sales growth (9% better than last year) but post a 10% decline in quarterly earnings, to $0.47 per diluted share.

Things haven't been going too well at Briggs for quite some time. Granted, last quarter the company grew its sales by better than 16% year over year. But that good news was dwarfed by the towering pile of unsold inventories sitting back home in Briggs' warehouse. According to its fiscal Q1 2006 10-Q filing with the SEC, Briggs' inventories rose 25% year over year. Accounts receivable grew in tandem, up 27% against the year-ago period.

Meanwhile, gross margins are deteriorating as raw materials costs rise and pricing power falls. Briggs' gross margins have been declining in comparison to their year-ago levels since as far back as September 2004, and the company has been unable to sufficiently streamline its operations and cut costs to make up the difference.

To put tomorrow's numbers in context, let's examine the company's recent performance. Here are the past six quarters' margins, to provide both a "sequential" and a "year-over-year" picture.

Marg.

9/05

6/05

3/05

12/04

9/04

6/04

Gross

15.9%

18.6%

19.7%

21.1%

16.1%

22.2%

Op.

2.2%

10.9%

11.6%

2.7%

0.7%

13.7%

Net

0.9%

5.8%

9.6%

1.4%

(0.3%)

7.4%
* Data provided by Capital IQ, a division of Standard and Poor's

Now compare Briggs' numbers to those of major competitor Honda (NYSE:HMC).

Marg.

9/05

6/05

3/05

12/04

9/04

6/04

Gross

29.6%

29.7%

29%

30.5%

31%

30.4%

Op.

8.1%

8.5%

6.8%

8.8%

9.6%

8.6%

Net

5.7%

4.9%

4%

7.1%

6.1%

5.5%
* Data provided by Capital IQ, a division of Standard and Poor's

As Briggs stalls, its larger Japanese rival continues to boost its numbers year over year, and to grow its gross, operating, and net margins sequentially as well. That suggests that rising raw materials costs aren't Briggs' only problem -- and it helps to explain the company's inventory pileup as well.

Fool contributor Rich Smith has no position in either of the companies mentioned in this article.