Earnings Preview: ITT Educational Services

ITT Educational Services (NYSE: ESI  ) will try to beat its earnings estimates for the fifth consecutive quarter. The company will unveil its latest earnings on Thursday, July 21. ITT Educational Services provides postsecondary degree programs in the United States. It offers diploma, associate, bachelor, and master degree programs.

What analysts say:

• Buy, sell, or hold?: Analysts think investors should stand pat on ITT Educational Services with 12 of 19 analysts rating it hold. Analysts like ITT Educational Services better than competitor Career Education overall. Four out of 17 analysts rate Career Education a buy compared to five of 19 for ITT Educational Services. Analysts still rate the stock a hold, but they are a bit more wary about it compared to three months ago.
• Revenue Forecasts: On average, analysts predict $377.4 million in revenue this quarter. That would represent a decline of 6.1% from the year-ago quarter.
• Wall Street Earnings Expectations: The average analyst estimate is earnings of $2.64 per share. Estimates range from $2.51 to $2.79.

What our community says:
CAPS All Stars are solidly backing the stock with 87% giving it an "outperform" rating. The community at large backs the All Stars with 84.2% assigning it a rating of "outperform." Fools have embraced ITT Educational Services and haven't been shy with their opinions lately, logging 178 posts in the past 30 days. ITT Educational Services' bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
ITT Educational Services' profit has risen year over year by an average of 15.5%. A year-over-year revenue decrease last quarter snaps a streak of three consecutive quarters of revenue increases.

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	64%	67%	66.4%	66.7%
Operating Margin	36.7%	39.6%	37.8%	39.1%
Net Margin	22.3%	23.8%	23.3%	23.9%

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