How Will Crown Crafts (CRWS) Stock Be Affected By Its Earnings Results?

NEW YORK (TheStreet) --Crown Crafts Inc. (CRWS) reported its financial results for the 2014 fourth quarter and fiscal year, which showed a 9.4% increase in net income for the quarter and a 12.9% increase in net income for the full year.

The company, which sells infant and toddler related products through its Crown Crafts Infant Products Inc. subsidiary, posted net income of $2 million, or 21 cents per diluted share on net sales of $24 million for the 2014 fourth quarter, compared to net income of $1.9 million, or 19 cents per diluted share, on net sales of $23.6 million for the 2013 fourth quarter.

Crown Crafts' net income for the full year 2014 was $5.8 million, or 59 cents per diluted share on net sales of $81.3 million, compared with net income of $5.1 million, or 52 cents per diluted share, on net sales of $78.4 million for fiscal 2013.

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Shares of Crown Crafts are down -0.25% to $8.08 at the beginning of trade on Wednesday.

Separately, TheStreet Ratings team rates CROWN CRAFTS INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CROWN CRAFTS INC (CRWS) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 36.13% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CRWS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • CROWN CRAFTS INC has improved earnings per share by 12.5% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, CROWN CRAFTS INC increased its bottom line by earning $0.52 versus $0.51 in the prior year. This year, the market expects an improvement in earnings ($0.60 versus $0.52).
  • CRWS's revenue growth trails the industry average of 14.8%. Since the same quarter one year prior, revenues slightly increased by 2.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CRWS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.42, which illustrates the ability to avoid short-term cash problems.
  • You can view the full analysis from the report here: CRWS Ratings Report
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