Precision Castparts Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Precision Castparts (NYSE:PCP) will unveil its latest earnings tomorrow, Thursday, January 24, 2013. Precision Castparts manufactures complex metal components and products and provides investment castings, forgings, and fastener systems for aerospace and industrial gas turbine applications.

Precision Castparts Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of $2.48 per share, a rise of 17% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from $2.58. Between one and three months ago, the average estimate moved down. It has been unchanged at $2.48 during the last month. For the year, analysts are projecting net income of $9.92 per share, a rise of 17.8% from last year.

Past Earnings Performance: The company is hoping to beat estimates after missing the mark for two straight quarters. Last quarter, it reported profit of $2.28 per share against an estimate of net income of $2.35 per share. The quarter before that, it missed forecasts by one cent.

Start 2013 better than ever by saving time and making money with your Limited Time Offer for our highly-acclaimed Stock Picker Newsletter. Click here for our fresh Feature Stock Pick now!

Wall St. Revenue Expectations: Analysts are projecting a rise of 15.9% in revenue from the year-earlier quarter to $2.11 billion.

A Look Back: In the second quarter, profit rose 12.9% to $332.7 million ($2.27 a share) from $294.7 million ($2.03 a share) the year earlier, but fell short analyst expectations. Revenue rose 7.9% to $1.93 billion from $1.79 billion.

Here’s how Precision Castparts traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

pcp

Stock Price Performance: Between October 22, 2012 and January 17, 2013, the stock price rose $21.16 (12.8%), from $165.11 to $186.27. The stock price saw one of its best stretches over the last year between November 26, 2012 and November 30, 2012, when shares rose for five straight days, increasing 2.8% (+$4.94) over that span.

Key Stats:

This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 24% in the fourth quarter of the last fiscal year and 19.5% in the first quarter before increasing again in the second quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 14.2% in the third quarter of the last fiscal year, 15.4% in the fourth quarter of the last fiscal year and 17.6% in the first quarter before increasing again in the second quarter.

Analyst Ratings: With 13 analysts rating the stock a buy, none rating it a sell and five rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 3.28 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.

(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)