It's not easy for companies tied to the housing industry these days, so when cabinet maker American Woodmark (NASDAQ:AMWD) reports its fiscal second-quarter 2008 earnings on Thursday, we won't be expecting too much. But we will be expecting something. What is that something? Read on, and find out.

What analysts say:

  • Buy, sell, or waffle? Four analysts track Woodmark, giving it one buy rating, two holds, and a sell.
  • Revenue. On average, they expect to see sales drop 21% to $167.3 million.
  • Earnings. Profits are predicted to plunge 35% to $0.37 per share.

What management says:
Woodmark got off to a rough start this fiscal year. Read about it here; for the dime version, sales fell 25% year over year as the housing debacle deepened. Unable to fully use its manufacturing capacity, Woodmark's margins and profits suffered even more (with per-share profits dropping more than twice as quickly).

What management does:
How bad were the margins? Take a gander and see:

Margins

4/06

7/06

10/06

1/07

4/07

7/07

Gross

17.9%

19.2%

20.3%

20.6%

20.5%

20.0%

Operating

6.4%

7.4%

8.0%

7.6%

6.5%

5.1%

Net

4.0%

4.6%

5.0%

4.9%

4.3%

3.4%

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:
With miserable sales news just out from Woodmark's two key customers, Lowe's (NYSE:LOW) and Home Depot (NYSE:HD), you can safely bet that Thursday's news will disappoint. The real question here is whether Woodmark will somehow manage to do less (or perhaps more) horribly than Wall Street expects.

Personally, my guess is "more" -- but I say that with some trepidation. Sources who know Woodmark better than I do tell me that Woodmark's manufacturing model is focused on just-in-time delivery. As a result, when inventories fall less steeply than sales, or grow faster than sales, this doesn't necessarily bode as ill for Woodmark's cash production as it would for other firms.

Still, when I see sales dropping 16.6% year over year on a trailing-12-month basis, while inventories decreased only 14.3% on average, experience tells me this can't be good for profits. Unless and until I'm proven (happily) wrong this week, I'm sticking with my suspicion that the trend doesn't look good for Woodmark.

What did we expect to see at American Woodmark last quarter, and what did we get? Find out in:

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Fool contributor Rich Smith does not own shares of any company named above. The Motley Fool's disclosure policy is perfectly square.