Real live ray-gun maker Ionatron (NASDAQ:IOTN) reports Q1 2007 earnings results tomorrow morning. Want to know what Wall Street expects to see? Read on. Want to know what really matters? Read on a bit more.

What analysts say:

  • Buy, sell, or waffle? A single analyst follows Ionatron, rating it a buy.
  • Revenue and earnings. This analyst performs the neat trick of predicting a $0.04 per share loss tomorrow ... without having any idea what kind of revenue Ionatron made.

What management says:
A quick scan of the most recent 10-K tells us that the firm lost $17.5 million on $10 million in sales last year -- a loss equal to 250% of the combined losses of the previous two years. This as sales plunged nearly 50%. Things are going downhill here, Fools, and quickly. (On the "plus" side, from a free cash flow perspective, the firm ran negative to the tune of $9.1 million -- only 60% worse than in 2005.)

What management does:
Unlike serious, profitable defense firms like Lockheed Martin (NYSE:LMT), General Dynamics (NYSE:GD), Raytheon (NYSE:RTN) or Armor Holdings (NYSE:AH), Ionatron continues to take a blaster to its investors' capital. Over the last 18 months, its already single-digit gross margin steadily deteriorated, eventually ending the year in the red. Naturally, that left less than nothing with which to report operating or net profits.





























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

One Fool says:
In the days leading up to its earnings news (or rather, lack thereof), Ionatron gave its boosters a boost of their own in the form of a series of press releases.

One, issued April 30, describes a contract from the U.S. Navy to test out a "Dual Effects, Stand-Off IED Neutralization System" -- essentially, a bomb zapper -- for use by the Marines. Reporting on the story, AP misplaced a decimal when describing the company as having "a market cap about equal to the contract," however. At nearly half a billion dollars' market cap, Ionatron sells for nearly 1,000 times the value of the $500,000 contract in question.

Although the press release does not make this clear, the contract in question appears to be part of a larger, $9.8 million contract described in a separate release less than a week earlier. Missing from both announcements is any description of the time span over which Ionatron expects the funds from this contract to be disbursed. I suppose it goes without saying that the firm gives no indication of whether it expects to earn a profit on the work.

Fool contributor Rich Smith does not own shares of any company named above. The Fool has a disclosure policy.