For the first time in more than a year, professional services provider Resources Global
What analysts say:
- Buy, sell, or waffle? Thirteen analysts follow RG, which gets eight buy ratings and five holds.
- Revenues. On average, they're looking for 16% sales growth to $185.9 million.
- Earnings. However, profits are expected to flatline at $0.27 per share.
What management says:
Management has kept pretty mum since last updating us on its Q2 performance, filing no 8-Ks of interest with the SEC. As for what it said the last time it spoke, you can read all about the earnings news here, and check out a superb rendition of the conference call highlights here.
What management does:
The firm's investments in expanding its presence internationally continue to weigh on Resources' net margins, which, from a trailing-12-month perspective, continued sliding downwards last quarter. That said, gross margins are holding steady, and management managed to reverse the slide in its operating performance last quarter. Hopefully, that will begin to resemble an upward trend once Wednesday's news gets factored into these results.
|
8/05 |
11/05 |
2/06 |
5/06 |
8/06 |
11/06 |
|
|---|---|---|---|---|---|---|
|
Gross |
39.6% |
39.5% |
39.3% |
39.3% |
39.4% |
39.4% |
|
Operating |
17.0% |
16.3% |
15.5% |
15.0% |
14.5% |
14.6% |
|
Net |
10.4% |
10.1% |
9.8% |
9.6% |
8.7% |
8.2% |
One Fool says:
Summarizing and updating his thoughts on the company in a January update, Fool co-founder Tom Gardner seemed cautiously optimistic, praising Resources Global for beating consensus earnings estimates and matching "the low end of its own long-term sales goal" last quarter.
Why was Tom optimistic? Because he thinks "there's a chance that the company will be able to meet its targets" in the "more active second half of the fiscal year," especially if its international investments begin to pay off.
And why was he cautious? For one thing, because: "For the first few days of 2007, Resources Global [had] booked $347.9 million in sales," which was "below the company's full-year internal growth target (and the 16% long-term revenue growth target that [Tom] estimated for the company." And for another, because "with shares now up nearly 50% from August lows, the company seems pretty fully priced."
Get the Fool skinny on Tom's thoughts about the company and what price he thinks would be a bargain when you accept a free trial membership to Motley Fool Stock Advisor.
Need more Resources research? Peruse:
- Last quarter's earnings report: "Resources Global Still Spinning."
- Our write-up of the previous quarter's conference call: "Fool on Call: Resources Discovered."
- Our interview with CEO Donald Murray.
Fool contributor Rich Smith does not own shares of any company named above.
