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Stock Analyst Update

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Gabelli's earnings forecast may not be as good as it seems.

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In a preview of its forthcoming earnings release, mutual fund advisor Gabelli Asset Management (GBL) announced Wednesday that it expects to report earnings of $0.44 per share for its first quarter, 10% higher than consensus Wall Street estimate of $0.40 per share. This would be Gabelli's second earnings surprise in a row.

It's unclear, however, how big of a boost Gabelli received from capital gains in the company's investment portfolio, which are nonrecurring. In its fourth quarter, for example, such non-operating income--principally capital gains on the company's portfolio--accounted for 20% of total income before taxes and other non-operating expenses. We won't know the full story until Gabelli releases its full earnings report, which is expected the week of May 15.

Olivia Barbee does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.