After beating estimates last quarter by $0.04, Orbital (NYSE: ORB) has set the standard for itself. The company will unveil its latest earnings on Thursday, July 21. Orbital develops and manufactures small- and medium-class rockets and space systems for commercial, military, and civil government customers, including the U.S. Department of Defense and the National Aeronautics and Space Administration.

What analysts say:

  • Buy, sell, or hold?: Analysts are very bullish on this stock, unanimously backing it as a buy. Analysts like Orbital better than competitor Alliant Techsystems overall. Six out of 13 analysts rate Alliant Techsystems a buy compared to 10 out of 10 for Orbital. Orbital's rating hasn't changed over the past three months.
  • Revenue Forecasts: On average, analysts predict $328 million in revenue this quarter. That would represent a decline of 2.9% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.22 per share. Estimates range from $0.21-$0.23.

What our community says:
CAPS All Stars are solidly behind the stock, with 96.9% of them granting it an "outperform" rating. The community at large agrees with the All Stars, with 96.7% awarding it a rating of "outperform." Fools are bullish on Orbital, though the message boards have been quiet lately, with only 87 posts in the past 30 days. Even with a robust four out of five stars, Orbital's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Orbital's profit has risen year over year by an average of 36.9%. Revenue has gone up now for three straight quarters. The company's gross margin shrank by 8.4 percentage points in the last quarter. Revenue rose 7.3%, while cost of sales rose 18.9% to $271 million from a year earlier.

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

14.7%

21.8%

24.4%

19.7%

Operating Margin

3.2%

7.0%

6.2%

3.6%

Net Margin

3.9%

6.1%

3.4%

1.9%

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