Foolish Forecast: Clear-Cut Apogee

If you're not familiar with the company, the name Apogee (Nasdaq: APOG  ) connotes ... what? There's no ".com" after the name, but it sounds vaguely high-tech, right? Something to do with space and satellite radio, perhaps? Nope. The company makes glass. As in the stuff you're staring out of forlornly while locked in your cubicle farm on this bright spring day.

Reason enough to get interested in the company's Q4 and full-year 2006 earnings release, due out tomorrow? Let's find out.

What analysts say:

• Buy, Sell, or Waffle? Only two analysts follow little Apogee, but both give it their highest buy ratings.
• Revenues. They expect to see only a 4% increase in quarterly sales versus last year, to $182.7 million.
• Earnings. However, profits are predicted to rise 46%, to $0.19 per share.

What management says:
Here's what CEO Russell Huffer had to say four months ago about tomorrow's results: "In the fourth quarter, we are anticipating a stronger operating performance from our architectural segment, which continues to build momentum.... Markets are strengthening, we're seeing pricing increases in our architectural glass business, and project mix is improving.. The strength of our backlog is also very encouraging, with a solid fourth-quarter position and a good base of business going into next year."

What management does:
The numbers support that upbeat assessment. Over the past 18 months, Apogee has grown its gross margins slightly, and its operating and net margins impressively. (Just be aware that the net margin was artificially boosted by a one-time tax credit recorded in Q3 2005.)

Margins %	8/04	11/04	2/05	5/05	8/05	11/05
Gross	17.3	17.6	18.1	18.2	18.4	18.2
Op.	1.4	2.2	3.6	3.9	4.5	4.4
Net	0.6	1.1	2.6	2.7	2.8	3.2

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ending in the named months.

One Fool says:
There's no question that the trends reflected above are positive. But when updating its fiscal 2007 guidance back in February, Huffer seemed to hitch his company's future performance to continued strength in the commercial construction industry. If the economy remains strong, Apogee expects to deliver annual revenue growth averaging 8%, and earnings growth averaging 20%. Even if the economy falters, however, the company's plans to continue seizing market share and controlling costs, if successful, should keep Apogee growing profits in excess of sales gains.

Competitors:
Most of Apogee's competitors are privately owned. The publicly traded rival investors are most likely to have heard of is Income Investor pick PPG Industries (NYSE: PPG  ) .

Fool contributor Rich Smith does not own shares of any company named above.