Mercury Computer Systems Earnings Preview

Watch Mercury Computer Systems' (Nasdaq: MRCY  ) earnings report to see if it can beat analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings 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 eight of 10 rating it a buy and the remainder rating it a hold. Analysts like Mercury Computer Systems better than competitor Super Micro Computer overall. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared with three months ago.
• Revenue forecasts: On average, analysts predict $58.7 million in revenue this quarter. That would represent a decline of 7.8% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.13 per share. Estimates range from $0.12 to $0.15.

What our community says:
Most CAPS All-Stars are skeptical of Mercury Computer Systems' prospects, with 66.2% awarding it an "underperform" rating. Like the All Stars, the community is also not a fan of Mercury Computer Systems with 67.7% granting it "underperform" rating. Fools are bearish on Mercury Computer Systems, though the message boards have been quiet lately with only 44 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 76.5%. Revenue has now gone up for three straight 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	Q3	Q2	Q1	Q4
Gross Margin	54.9%	57%	58.8%	54.3%
Operating Margin	11.7%	11.7%	10.1%	14.4%
Net Margin	9.0%	9.3%	7.0%	29.3%

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