Mercury Computer Systems Earnings Preview

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Mercury Computer Systems (NAS: MRCY) only managed to meet estimates last quarter, but investors hope it will surpass expectations this quarter. The company will unveil its latest earnings on Tuesday. Mercury Computer Systems designs, manufactures, and markets computer signal and image processing systems and software for embedded and other computing markets.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Mercury Computer Systems, with seven of eight rating it a buy and the remainder rating it a hold. Analysts like Mercury Computer Systems better than competitor Super Micro Computer overall. Analysts still rate the stock a Moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $68.3 million in revenue this quarter. That would represent a rise of 23.1% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.26 per share. Estimates range from $0.24 to $0.27.

What our community says:
Most CAPS All-Stars are skeptical of Mercury's prospects, with 60% granting it an underperform rating. Like the All-Stars, the community is also not a fan of Mercury Computer Systems with 60.6% assigning it underperform rating. Fools are skeptical of Mercury Computer Systems, though the message boards have been quiet lately with only 45 posts in the past 30 days. Mercury Computer Systems' bearish CAPS rating of one out of five stars falls short of the Fool community sentiment.

Management:
Mercury Computer Systems' profit has risen year over year by an average of 27.6% over the past five quarters. Revenue has fallen in the past two quarters.

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

Q1

Q4

Q3

Q2

Gross Margin

60.9%

56.7%

54.9%

57.0%

Operating Margin

7.3%

10.2%

11.7%

11.7%

Net Margin

5.4%

6.9%

9.0%

9.3%

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Earnings estimates provided by Zacks.

At the time this article was published

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