Can someone please check the calendar for me? Unless my eyes deceive me, LASIK specialist LCA-Vision (NASDAQ:LCAV) last reported earnings a mere two months ago. Yet here it is again, reporting Q2 2007 numbers on Tuesday. Let's hope they're a sight for sore eyes.

What analysts say:

  • Buy, sell, or waffle? Seven analysts follow LCA, giving it four buy ratings and three holds.
  • Revenue. On average, they expect to see 13% sales growth, to $74 million.
  • Earnings. Yet profits are predicted to fall 14% to $0.44 per share. What gives?

What management says:
Honestly, I'm not sure where the analysts are coming from on this one. CEO Steven Straus pronounced himself "pleased" with last quarter's results, which featured 5% same-store sales growth, 11% growth in procedures performed, and an 18% bump in revenue. (Since it tops the procedure growth rate, that last figure suggests pricing power.) Granted, net profits didn't measure up to the growth rate, but with the firm's share count shrinking by more than 5% over the past year, earnings per share beat out revenue growth, expanding 23%.

Looking forward, the story gets even better. LCA affirmed its previous full-year guidance of 20% to 25% revenue growth and $2.05 to $2.15 in per-share profits. Crunching these numbers, it appears that management expects profit growth to more than double sales growth over the course of this year, with the midpoint estimate calling for profits a whopping 57% better than last year. Astounding.

What management does:
Perhaps Wall Street just plain doesn't believe what Straus is telling it. If that's the case, it's hard to blame the analysts for their distrust. Gross profit margins may be on the rise, but operating margins have been up one quarter and down the next for more than a year now -- and net margins look nearly as wobbly.





























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 this space, I'd ordinarily tell you what the Fool analyst who recommended LCA to members of Motley Fool Stock Advisor had to say about the company's prospects. Unfortunately, Fool rules require that we keep mum on these thoughts for at least 30 days after publication, to give our paying subscribers first dibs. (If you can't wait 30 days to hear what Fool co-founder David Gardner thinks about LCA, though, then here's a workaround -- sign up for a free, 30-day trial to the service, and you can read his latest update for free.)

But perhaps my own humble thoughts will tide you over while we wait for the 30 days to expire? In my opinion, the margins we see right now may affect the stock's price today, but in the long term, the company's success (and that of its stock price) depend more on whether LCA can grow to become the undisputed dominant player in its industry.

In that regard, things look pretty good. Straus mentioned back in May that LCA is enjoying "continued gains in market share in both new and existing markets," and furthermore, that LCA has "achieved this growth in an industry where procedure volume has been flat-to-down for the past six quarters." (For the record, archrival TLC Vision (NASDAQ:TLCV) also reported above-market procedure growth -- if less than LCA's -- suggesting that most market-share gains are coming from privately owned laser eye surgery shops.)

More market share means more economies of scale, more pricing power, more ability to reduce margins as needed to grab more market share ... and so on, ad infinitum. Color me bullish on LCA.

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