Earnings Today: Culp, CLARCOR, Cstrip

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Includes: BIDU, CECE, CFI, CLC, CRWS, CTRP, DCI, ESE, EXPE, LONG, PCLN, SPAN, UFI
by: Stephen Walsh

Summary

Culp has strong fundamentals but seems to be fairly valued. The company has beat earnings for 4 quarters in a row.

CLARCOR has stronger fundamentals and seems to be undervalued. The company has beaten EPS estimates by 12.68% on average for the last 4 quarters.

Ctrip's recent merger with Qunar may have an impact on the earnings announcement, as well as the future growth potential of the company.

Introduction

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Several companies are reporting quarterly earnings this afternoon after market close. Three that are particularly interesting are Culp, Inc. (NYSE:CFI), CLARCOR Inc. (NYSE:CLC), and Ctrip.com International Ltd. (Nasdaq:CTRP). I believe that Culp and CLARCOR are poised to do well this quarter, while I sincerely have no idea what will happen with Ctrip.

Culp, Inc.

Culp, Inc. is a mattress fabric manufacturer based in the North Carolina. The company's main competitors are Unify, Inc. (NYSE:UFI), Crown Crafts (Nasdaq:CRWS), and Span-America Medical Systems, Inc. (Nasdaq:SPAN). Culp has about 1188 employees and was founded in 1972. The stock's 52-week high was 35.23 in September of last year and the 52-week low was 22.61 back in January. The current price is around 28.75, so it is trading in the middle of the range.

CFI Chart

CFI data by YCharts

Culp reported revenue of 314.45M for the past 12 months, which came out to be 6.284 per share. This was 4% lower than the same quarter last year. This quarter, the company logged a net income of 18.25M.

As of right now, Culp, Inc.'s P/E ratio is 19.7, compared with the industry average of 15.86, but we may see a significant change in share price depending on the results of the earnings announcement. Over the past 12 months, Culp has an ROE of 15.18%, an ROA of 10.69%, and an operating margin of 8.76%. Compare this to industry averages of 11.53%, 4.69%, and 7.82%, respectively.

Culp, Inc. is scheduled to report earnings after market close today. Consensus estimates have the company on the hook for 0.47 per share on revenues of 78.92M. Culp has exceeded analyst estimates in the past 4 quarters, so if that is any indication of this quarter's performance, a positive surprise may lead to an increase in price in after-hours trading.

CLARCOR Inc.

For those who are not familiar with CLARCOR Inc, the company was founded in 1904. Their main competitors in the industry are CECO Environmental Corp. (Nasdaq:CECE), Donaldson Company, Inc. (NYSE:DCI), and ESCO Technologies Inc. (NYSE:ESE). The Tennessee-based company has about 1700 employees, and manufactures filtration products for the treatment controls industry, among others.

CLC Chart

CLC data by YCharts

CLARCOR Inc. reported revenue of 1.446B for the past 12 months, which came out to be 6.441 per share. This was -10% lower than the same quarter last year. This quarter, the company logged a net income of 129.16M. Looking forward, the consensus EPS long term growth rate is 8.9%. Analysts expect the industry to retract by over 4% this quarter while CLARCOR grows by about 4% themselves. Such outperformance in their industry could lead to an increase in the stock price if the earnings announcement follows the trend set in the last 4 quarters.

Currently, CLARCOR's P/E ratio is 23.46, which is slightly higher than the industry average of 22.01. The shares posted a 52-week high on June 18th last year. If it means anything, this was right after their earnings announcement. Over the past 12 months, CLARCOR has an ROE of 11.63%, an ROA of 6.96%, and an operating margin of 13.19%. They are outperforming the industry averages of 8.62%, 5.83%, and 10.02%, respectively.

CLARCOR Inc. is set to release earnings after market close today, and is expected to have an EPS of 0.68 on 357.38M in revenue. This will be an increase of 0.02 per share over last quarter's EPS if the estimates are correct. All 3 analysts on the stock gave the same EPS estimate, which may indicate that the stock is under analyzed (or they are doing the same math). CLARCOR has outperformed analyst estimates by an average of 12.68% over the last 4 quarters, beating each time.

Ctrip.com International Ltd.

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Ctrip.com International Ltd. has been in operation for 17 years, has about 1420 employees and has a market cap of 14.93B USD. They are a Chinese travel services company; providing tours, reservations, ticketing, and other products. Ctrip's main competitors are eLong, Inc. (Nasdaq:LONG), Priceline Group, Inc. (Nasdaq:PCLN), and Expedia Inc. (Nasdaq:EXPE), but they are China's largest online travel agency. The stock is currently trading near the middle of its 52-week range.

Ctrip reported revenue of 1.73B USD for the past 12 months, which came out to be 1.14 USD per share. This quarter, the company logged a net income of 398.49M USD. Looking forward, the consensus EPS long term growth rate is 26%. This industry is dominated by Priceline and Expedia, who control the lion's share of the market. Ctrip is headquartered in Shanghai China

As of right now, Ctrip's P/E ratio is 36.16, compared with the industry average of 19.23, but we may see a significant change in share price depending on the results of the earnings announcement. The shares posted a 52-week high in November. Over the past 12 months, Ctrip has an ROE of 14.9%, an ROA of 4.56%, and an operating margin of 3.47%. Compare this to industry averages of 22.47%, 5.28%, and 13.01%, respectively.

Yesterday, Ctrip shares closed up 1.5% on the news that they were combining products and services with Baidu (NASDAQ:BIDU), China's largest and most influential web services company. Priceline and Expedia shares remained relatively unchanged as a result.

CTRP Chart

CTRP data by YCharts

Ctrip is scheduled to report earnings after market close today. Consensus estimates have the company pegged for a loss of 3.62 yuan per American Depository Share ex items on revenues of 4.14B yuan. This would be 0.55 USD per share on revenues of about 630M USD. Earnings reports have been notoriously surprising over the past 4 quarters, with an average difference of over 1000%. It is hard to predict what will come of this afternoon's report, so I would keep a close eye on what happens.

Conclusion

Out of these three companies, CLARCOR has the strongest fundamentals in relation to its industry. Culp is a close second, but I also believe it is trading cheap right now. Culp has more upside potential given favorable reports this afternoon, and I am worried about CLARCOR's stunted revenue growth. Ctrip's merger with Qunar should be good for the company going forward. If the company misses on earnings and the price drops, the stock may trade unnecessarily low; an opportunity to profit from a contrarian perspective.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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