We've already written about Motley Fool Hidden Gems pick II-VI
What analysts say:
- Buy, sell, or waffle? One less analyst than last quarter now follows II-VI, but the vote's still unanimous: 5-0. They all vote "buy."
- Revenues. On average, they're looking for 22% sales growth to $81.7 million.
- Earnings. Profits are predicted to rise nearly as fast, up 21% to $0.40 per share.
What management says:
You've already seen the big news of the quarter. Recognizing that it does lasers better than most anybody, II-VI has decided to cut some fat, get lean and mean, and focus on its strengths. The company's eV Products division, which makes X-ray sensors, is on the auction block, price unknown.
With operating margins that hover in the 6.2% range, eV Products can certainly make some money for somebody. Accuray
What management does:
And after II-VI succeeds in unloading eV Products? Well, revenues will take about a 2% hit, but on the bright side, profit margins earned at II-VI's remaining businesses should improve.
9/06 |
12/06 |
3/07 |
6/07 |
9/07 |
12/07 |
|
---|---|---|---|---|---|---|
Gross |
40.3% |
41.6% |
41.8% |
41.7% |
41.3% |
40.9% |
Operating |
16.7% |
18.1% |
17.8% |
18.4% |
18.3% |
18.3% |
Net |
4.8% |
6.2% |
7.1% |
14.4% |
14.6% |
20.2% |
One Fool says:
Nor, by the way, need you worry that the loss of a couple of million in quarterly revenue will curtail II-VI's growth. Based on the guidance management included in its divestiture announcement, we're told to expect about $81 million in revenues tomorrow. Whether the analysts have figured this into their estimates, I do not know. What I do know is that it still makes for strong double-digit sales growth -- and there's more where that came from.
II-VI says that it booked $93 million in new orders during the quarter. And if the company sold $81 million worth of stuff, but received orders for $93 million more stuff, that must mean ... you guessed it -- that sales are still growing.
So to sum up, we've got growing sales and expanding profit margins on those growing sales. Looks to me like II-VI's growth speedometer goes to XI.
IV more on II-VI, read: