Spectrum Brands (NYSE:SPC), the company behind Rayovac batteries, Spectracide lawn-care products, Remington shavers, and Tetra fish-care supplies, will report Q4 2006 earnings on Tuesday morning. Let's look at where the company stands today.

What analysts say:

  • Buy, sell, or waffle? Spectrum Brands is followed by nine Wall Street analysts, according to Reuters Estimates. One of them has a buy rating on the stock, one a sell, and the remaining seven are just holding. In our Motley Fool CAPS community, four all-star players have a bullish opinion, with no bearish opposition. The stock is certainly lightly followed, and we welcome your input on Spectrum Brands.

  • Revenues. The analyst community expects sales of about $597 million, down from $603 million a year ago.

  • Earnings. Wall Street is looking for about $0.06 of EPS, down from $0.13 last year on a pro forma basis, excluding results from discontinued operations, and restructuring and merger costs.

What management says:
CEO Dave Jones knows his company isn't performing very well, and he sounds determined to do something about that. "The Spectrum Brands management team is fully focused on improving our financial performance," he said in connection with the Q3 earnings report. "We continue to make good progress on our cost-reduction initiatives. In addition, we are examining ways to reduce debt and leverage levels and strengthen our balance sheet through potential divestiture of selected assets, with the goal of becoming a leaner, more flexible organization, well-positioned to create long-term shareholder value."

What management does:
Uh-oh. Those cost-reduction plans should come in handy right about now. Margins are sliding downward everywhere we look, albeit slowly. But there isn't much meat left on the net income bones, and the ROE drop is downright alarming. The stock is trading more than 60% below the 52-week high set in April, and when you look at these trends, it's easy to see why.

Margins %

4/05

7/05

9/05

1/06

4/06

7/06

Gross

41.4

40.7

39.5

39.3

38.5

38.0

Op.

12.5

12.6

11.4

10.7

10.0

9.1

Net

4.5

4.6

3.6

2.7

2.3

1.2

Return on Equity

10.2

11.3

8.1

4.1

3.6

1.4

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:
Spectrum Brands is reporting problems in nearly all of its segments, and analysts have started to come up with various sell-off plans in which the company would divest a couple of troubled brands to bolster its balance sheet. It now seems that management might be listening. In July, Goldman Sachs (NYSE:GS) was brought in to advise on asset sales, both to shore up the finances and to sharpen Spectrum's focus.

There is no word yet on whether Spectrum will lose some of its wavelengths, or for what price. The mainstay battery brands are doing well in North America but not so well elsewhere, and it looks like the Europeans don't appreciate Remington shavers anymore. The company recently hired Packers quarterback Brett Favre to push the Rayovac brand a bit harder, and Cindy Crawford for Remington, but we don't have a read on the efficacy of those campaigns yet. As for Tuesday's report, it's not an easy call. The analysts providing forecasts have wildly varying opinions, from $0.10 in profits per share to $0.02 in losses, and I can't tell which one is closer to the truth. Stay tuned.

Competitors:

  • Procter & Gamble (NYSE:PG)
  • Koninklijke Philips (NYSE:PHG)
  • Scotts Miracle-Gro (NYSE:SMG)
  • Helen of Troy (NASDAQ:HELE)
  • Central Garden & Pet (NASDAQ:CENT)

If you're looking for excellently managed conglomerates, large or small, the Fool might have a few ideas for you. Try any of our Foolish newsletters free for 30 days.

Fool contributor Anders Bylund holds no position in any of the companies discussed here, but he uses a lot of Rayovac batteries. You can check out Anders' holdings if you like. Foolishdisclosureis powerful stuff indeed.