II-VI Earnings Preview

Motley Fool Staff
Updated

Investors never know what to expect for II-VI (NAS: IIVI) , as it has wavered between topping and missing analysts estimates during the past fiscal year. The company will unveil its latest earnings on Tuesday, Jan. 24. 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?: The majority of analysts back II-VI as a buy. But with 60% of analysts rating it a buy, II-VI is still below the mean analyst rating of its nearest 10 competitors, which average 61.5% buys. Analysts don't like II-VI as much as competitor Newport overall. Five out of seven analysts rate Newport a buy compared to three of five for II-VI. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.

  • Revenue Forecasts: On average, analysts predict $127.8 million in revenue this quarter. That would represent a rise of 5.7% from the year-ago quarter.

  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.20 per share. Estimates range from $0.18 to $0.23.

What our community says:
CAPS All-Stars are solidly backing the stock with 98.9% awarding it an "outperform" rating. The community at large backs the All-Stars with 98.3% granting it a rating of "outperform." Fools have embraced II-VI and haven't been shy with their opinions lately, logging 276 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 95.9% over the past five 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

39.8%

41.6%

40.7%

41.4%

Operating Margin

17.8%

19.5%

19.7%

20.0%

Net Margin

13.4%

16.7%

17.8%

15.8%

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At the time thisarticle was published 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.

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