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Q3 Earnings Preview for Compass Minerals International (NYSE:CMP)

in EARNINGS/INVESTING IDEAS by

Compass Minerals International, Inc. (NYSE:CMP) is scheduled to report Q3 earnings results after markets close for trading on November 4, 2020.

The company is expected to report earnings of $0.44/share on revenue of $320.8 million. The consensus earnings per share (EPS) of $0.44/share is based on a poll of 9 analysts and represents a growth in eps of 22.8% over the same quarter last year, when the company reported earnings of $0.36/share.

The revenue forecast of $320.8 million based on a poll of 6 analysts implies a year-over-year (YoY) decline in revenue of −6.0%. Last year the company reported $341.3 million in revenue for the quarter.

Expected to report EPS growth of 22.8% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $320.79 $341.30 −6.0%
EPS $0.44 $0.36 22.8%

Earnings Call Trends

Historically, management has exceeded analyst expectations 3 out of the last 8 tracked quarters, and missed expectations 5 quarters.

What are your expectations from Compass Minerals International, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.18 $0.04 121.9% Beat
Q1, 2020 $0.57 $0.80 39.6% Beat
Q4, 2019 $1.82 $1.63 −10.5% Missed
Q3, 2019 $0.71 $0.36 −49.1% Missed
Q2, 2019 -$0.14 -$0.29 -107.4% Missed
Q1, 2019 $0.01 $0.22 3,548.4% Beat
Q4, 2018 $1.71 $1.41 −17.7% Missed
Q3, 2018 $0.40 $0.37 −7.0% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 9.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 4, 2020 $51.98 $56.69 9.1% Increase
May 5, 2020 $45.51 $46 1.1% Increase
February 10, 2020 $58.89 $64.92 10.2% Increase
November 5, 2019 $59.41 $55.02 −7.4% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.11, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.11 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Compass Minerals International, Inc. is currently trading at $59.29/share, down −2.3% for the day. The company is trading at approximately 89.1% of its 52-week high of $66.14/share. The company’s stock price is up 4.6% since the last earnings report and down −3.2% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 50.72 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:CMP Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 21.27 and a forward P/E multiple of 21.60.

Compass Minerals International, Inc.’s current share price also implies a price-to-book (P/B) multiple of 5.86. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $59.29
P/E Ratio 21.3x
P/E Ratio (Fwd) 21.6x
PEG Ratio 0.4
Total Debt / Total Capital 39.4%
Levered Free Cash Flow $190.6 million
EV / EBITDA 10.1x

Finbox

Compass Minerals International, Inc. is a mid-cap stock with a market capitalization of $2.06 billion and a total enterprise value of $3.332 billion. The company operates in the Materials sector and the Metals & Mining industry.

Compass Minerals International, Inc., produces and sells salt, and specialty plant nutrition and chemical products primarily in the United States, Canada, Brazil, the United Kingdom, and internationally. It operates through three segments: Salt, Plant Nutrition North America, and Plant Nutrition South America. The Salt segment offers sodium chloride and magnesium chloride, including rock salt, mechanically and solar evaporated salt, and brine and flake magnesium chloride products; and purchases potassium chloride and calcium chloride to sell as finished products or to blend with salt to produce specialty products. This segment provides products for use as a deicer for roadways, consumer, and professional use; as an ingredient in chemical production; for water treatment, human, and animal nutrition; and for various other consumer and industrial uses, as well as records management services. The Plant Nutrition North America segment offers sulfate of potash specialty fertilizers in various grades, including agricultural products used in broadcast spreaders, direct application, and liquid fertilizer solutions; turf products used by the turf and ornamental markets, as well as for blends used on golf course greens; organic products under the Protassium+ brand; and micronutrient products under the Wolf Trax brand, as well as specialty plant nutrition solution-based products and chemical solutions. This segment provides its products to distributors and retailers of crop inputs, as well as growers. The Plant Nutrition South America segment offers various specialty plant nutrients and supplements; water and wastewater treatment chemicals for cleaning, decontaminating, and purifying water; and process chemicals for industrial use. The company was formerly known as Salt Holdings Corporation and changed its name to Compass Minerals International, Inc. in December 2003. Compass Minerals International, Inc. was founded in 1993 and is headquartered in Overland Park, Kansas.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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