II-VI Earnings Preview

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Investors are on the edge of their collective seats, hoping that II-VI (NAS: IIVI) will top analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings Tuesday. II-VI develops, manufactures, and markets products for a diversified customer base, including industrial manufacturing, military and aerospace, electronics and telecommunications, and thermo-electronics applications.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on II-VI with three of five analysts rating it hold. Analysts don't like II-VI as much as competitor Newport overall. Four out of six analysts rate Newport a buy compared with two of five for II-VI. II-VI's rating hasn't changed over the past three months.
  • Revenue forecasts: On average, analysts predict $134.5 million in revenue this quarter. That would represent a rise of 18.8% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.35 per share. Estimates range from $0.34 to $0.36.

What our community says:
CAPS All-Stars are solidly behind the stock with 99% assigning it an "outperform" rating. The community at large agrees with the All-Stars with 98.3% giving it a rating of "outperform." Fools have embraced II-VI and haven't been shy with their opinions lately, logging 267 posts in the past 30 days. II-VI has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
II-VI's profit has risen year over year by an average of more than twofold.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q3

Q2

Q1

Q4

Gross Margin

40.7%

41.4%

41.0%

42.4%

Operating Margin

19.7%

20.0%

18.8%

18.6%

Net Margin

17.8%

15.8%

15.3%

14.1%

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The Motley Fool owns shares of II-VI. Motley Fool newsletter services have recommended buying shares of II-VI.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

At the time this article was published

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