What to Expect When Quiksilver (ZQK) Reports Earnings Tomorrow

NEW YORK (TheStreet) -- Quiksilver (ZQK) is scheduled to announce its earnings results for the third quarter of fiscal 2015 on Wednesday after the market close.

Analysts are expecting a narrower loss and a 13.5% year-over-year decrease in revenue for the quarter.

Analysts have forecasted a loss of 18 cents per share on $342.18 million in revenue for the quarter.

Last year, Quiksilver posted a loss of 20 cents per share on revenue of $395.66 million for the third quarter ended July 31.

Additionally, reports suggest the company may be up for sale as it seeks to avoid bankruptcy, according to Bloomberg.

The Huntington Beach, Calif.-based company designs, develops and distributes apparel, footwear and accessories for lifestyles related to surfing, skateboarding and snowboarding under brands such as Quiksilver, Roxy and DC.

Quiksilver stock closed up 0.51% to 46 cents on Tuesday.

Separately, TheStreet Ratings team rates QUIKSILVER INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:

"We rate QUIKSILVER INC (ZQK) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

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

  • Looking at the price performance of ZQK's shares over the past 12 months, there is not much good news to report: the stock is down 84.03%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • QUIKSILVER INC's earnings per share declined by 22.2% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, QUIKSILVER INC reported poor results of -$1.93 versus -$1.43 in the prior year. This year, the market expects an improvement in earnings (-$0.58 versus -$1.93).
  • ZQK, with its decline in revenue, underperformed when compared the industry average of 10.3%. Since the same quarter one year prior, revenues fell by 16.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 47.08% is the gross profit margin for QUIKSILVER INC which we consider to be strong. Regardless of ZQK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ZQK's net profit margin of -11.28% significantly underperformed when compared to the industry average.
  • Net operating cash flow has increased to -$23.60 million or 18.38% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 2.49%.
  • You can view the full analysis from the report here: ZQK Ratings Report

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