After back-to-back earnings misses, can high-tech potter Ceradyne
What analysts say:
- Buy, sell, or waffle? The baker's dozen of analysts following Ceradyne give it five buy ratings and eight holds.
- Revenues. On average, they're looking for sales to slip 2% to $184.1 million.
- Earnings. And they expect profits to trip and fall by 18% to $1.13 per share.
What management says:
Several recent 8-k filings point to a resurgence in Ceradyne's fortunes. For example, in March and April, the company reported $82.5 million in orders for ceramic plates used in body armor. And in early March, management confirmed that its stock had fallen so low that it was initiating a $100 million repurchase agreement.
What management does:
Even though profitability has suffered of late, Ceradyne continues to boast margins better than those of other high-tech ceramics companies. Superprofitable glass-and-ceramics maker Corning
9/06 |
12/06 |
3/07 |
6/07 |
9/07 |
12/07 |
|
---|---|---|---|---|---|---|
Gross |
38.5% |
39.4% |
39.7% |
40.3% |
40.7% |
40.4% |
Operating |
27.7% |
29.1% |
29.6% |
30.4% |
30.0% |
29.2% |
Net |
17.8% |
19.4% |
19.8% |
20.5% |
19.7% |
19.1% |
One Fool says:
Falling sales and shrinking margins aren't exactly what investors look for in a growth stock. The one piles on top of the other to yield profits that fall much more quickly than sales slow. And true to form, Ceradyne predicts that this year's sales may fall by as much as 6% -- while profits could drop twice as rapidly to yield as little as $4.55 per share by year's end.
What could improve these forecasts? Well, the company's BULL MRAP is jostling with armored-transport offerings from General Dynamics
I haven't seen a whole lot of significant sales news on these new offerings yet, however. Let's see whether we get some tomorrow.
What did we expect out of Ceradyne last quarter, and what did we get? Find out in: