CEOCAST's latest:
Earnings Preview: Home Solutions of America, Inc. (NASDAQ: HSOA), a provider of recovery, restoration and rebuilding/remodeling services to commercial and residential areas, will report fourth quarter and year-end results on Friday before the market opens. The company expects to hold a mid-morning call to discuss the results. Last week, HSOA pre-announced disappointing preliminary fourth quarter results, sending its stock to the lowest level since September. The company now expects to report fourth-quarter net earnings of 5 cents to 7 cents a share, sharply below its mid-November forecast of EPS of 18-22 cents. It said the shortfall was a result of weakness in the Rebuilding/Remodeling sector as a slowdown in the housing industry impacted work with certain customers of the company, and delays in government funding for several projects in New Orleans hurt results. Perhaps not coincidentally, company President and Chief Operating Officer Rick O'Brien will resign effective April 15 to pursue other opportunities. His operating responsibilities will be assumed by Brian Marshall and Mike Lane, two executives with significant operating experience, which should enable the company, which has grown rapidly, to better manage operations. To be sure, the magnitude of the miss and timing (late in the quarter) are troubling. Still, the company grew EPS at 80% last year, and if it earned approximately 45 cents last year as it preannounced, it trades for just 10 times trailing earnings, its lowest multiple ever. In the upcoming earnings announcement, investors will look for what the company says about first quarter and full-year prospects, and will look for improvements to the company's balance sheet. Sentiment in the stock is poor, as shares barely moved later in the week after it reported that its Fireline Restoration, Inc. subsidiary was awarded $17 million in contracts to provide construction services on new residential and commercial construction projects in the Tampa, Florida area for a leading regional developer. The new projects are in addition to the previously announced remediation and recovery work the company commenced last month in connection with the tornadoes that struck the Central Florida region in early February. Historically, this has been a favorable time for investors to own the stock. Last year, between March and May, shares more than doubled, fueled by a series of positive contract announcements. The company earned 6 cents from operations in the first quarter of 2006, which is typically a seasonally slower period for the company, so comparisons for Q1 2007 should be relatively easy. With approximately 35% of the float "short", significant multiple compression and poor sentiment, any favorable developments could cause shares to rally. Shares lost 21.6% and fell $1.27, to close at $4.60 for the week. |
