Cascade Earnings Preview: Full-Year EPS Expected to Have Doubled

Lift truck products maker and ostensible industrial bellwether Cascade

is scheduled to report fourth-quarter fiscal 2012 results tomorrow, March 29, after the closing bell. Cascade's earnings have increased year-over-year by an average of more than twofold over the past five quarters. But analysts have had a hard time zeroing in their expectations; sometimes overestimating and sometimes underestimating the company's per-share earnings. Shares jumped more than 9% following the previous quarterly report. Can investors hope to see such action this time?

Analysts predict that Cascade will post per-share earnings of $1.09 for the quarter and say that revenue totaled $128.5 million. In the same quarter of last year, the company reported $0.65 per share and $110.4 million in sales. That EPS estimate is unchanged over the past 60 days. But, as alluded to above, Cascade's EPS have fallen short of expectations half the time over the past eight quarters. The company did offer a positive surprise in the third quarter. In that third-quarter report, Cascade said net sales totaled $138 million, which was 25% higher than in the same quarter of fiscal 2011. And net income came to $19.6 million, or $1.74 per share. That was up year over year from $0.79 per share. Both profit and revenue results exceeded consensus estimates. The company also reported that its gross margin grew 34% year over year. Shipments increased the most in the Americas and Europe, while orders were highest in the Americas and Asia/Pacific. For the full fiscal year, analysts expect to see earnings of $5.51 per share and revenue of $538.3 million. That would be up substantially from $2.24 and $409.9 million in the previous year. That EPS estimate also is unchanged from 60 days ago.

Oregon-based Cascade Corp. manufactures and distributes of materials-handling load engagement devices and related replacement parts, primarily for the lift truck and to construction industries worldwide. The company sells its products to the end-users through the retail lift truck dealer distribution channel; lift truck manufacturers as original equipment manufacturer (OEM) equipment; and lift truck original equipment dealers. The company was founded in 1943 and it now is a member of the Russell 3000 index and sports a market cap of $619.0 million. Competitors include NACCO Industries

. This Cleveland-based maker of lift trucks and appliances fell short of revenue estimates but crushed expectations on earnings per share in its fourth-quarter report in February. The company reports next in May, and analysts are looking for lower EPS and year-over-year sales growth of about 8%. During the three months that ended in January, Cascade paid out a quarterly dividend of $0.25 per share, and analyst Global Hunter Securities initiated coverage on the stock with a Buy rating, citing the company's impressive ability to generate meaningful free cash flow through the full business cycle.

Cascade's long-term earnings per share growth forecast is 11.0%. Its return on equity is 19.9% and the operating margin is higher than the industry average. The P/E is 11.7 and the PEG ratio is 1.1. Cascade has a dividend yield of 1.8%. Three of four analysts who follow the stock rate it a Buy or Strong Buy; none recommend selling shares. Their mean price target on the shares is more than 12% higher than the current share price. The stock is more than 18% higher than at the beginning of the year, as well as more than 63% higher than six months ago. In February, shares pulled back from near the 52-week high but they have mostly recovered since. The price is above the 200-day moving average and in line with the 50-day moving average. Over the past six months, the stock has underperformed NACCO Industries but outperformed Caterpillar

and the broader markets.