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S&P 500 (NYSE:SPY) component McGraw-Hill Cos (NYSE:MHP) will unveil its latest earnings on Wednesday, October 31, 2012. McGraw-Hill produces a range of information products and services for the education, financial services, and business information markets.
McGraw-Hill Cos Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average estimate of analysts is for profit of $1.30 per share, a rise of 7.4% from the company’s actual earnings for the same quarter a year ago. The average estimate is the same as three months ago. Between one and three months ago, the average estimate moved down. It has risen from $1.29 during the last month. For the year, analysts are projecting net income of $3.40 per share, a rise of 16.8% from last year.
Past Earnings Performance: The company’s quarterly results have come in above estimates for the last three quarters. Last quarter, the company booked profit of 85 cents per share versus a mean estimate of net income of 76 cents per share.
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Stock Price Performance: Between August 1, 2012 and October 25, 2012, the stock price rose $8.23 (17.6%), from $46.68 to $54.91. The stock price saw one of its best stretches over the last year between August 23, 2012 and September 7, 2012, when shares rose for 11 straight days, increasing 6.9% (+$3.40) over that span. It saw one of its worst periods between May 22, 2012 and June 1, 2012 when shares fell for eight straight days, dropping 4.9% (-$2.22) over that span.
Wall St. Revenue Expectations: Analysts predict a rise of 3.1% in revenue from the year-earlier quarter to $1.97 billion.
A Look Back: In the second quarter, profit rose 2.3% to $216 million (76 cents a share) from $211.1 million (68 cents a share) the year earlier, exceeding analyst expectations. Revenue fell 2.1% to $1.55 billion from $1.58 billion.
This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 39.4% in the fourth quarter of the last fiscal year and 2.5% in the first quarter before increasing again in the second quarter.
Analyst Ratings: With seven analysts rating the stock a buy, none rating it a sell and one 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 0.92 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations. The company improved this liquidity measure from 0.9 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 2.4% to $2.64 billion while liabilities rose by 0.7% to $2.88 billion.
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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)
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