Investors braced for a bumpy ride ahead of Electro Scientific Industries' (Nasdaq: ESIO) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Wednesday, Oct. 26. Electro Scientific Industries provides high-technology manufacturing equipment to the global semiconductor and micro-electronics markets, including advanced laser systems.

What analysts say:

  • Buy, sell, or hold?: Analysts are very bullish on this stock, unanimously backing it as a buy. That rating hasn't budged in three months as analysts have remained unchanged in their opinion of the stock.
  • Revenue Forecasts: On average, analysts predict $90 million in revenue this quarter. That would represent a rise of 51.1% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.29 per share. Estimates range from $0.27 to $0.30.

What our community says:
CAPS All-Stars are solidly backing the stock, with 97.3% awarding it an "outperform" rating. The community at large concurs with the All-Stars, with 95.4% giving it a rating of "outperform." Fools have embraced Electro Scientific Industries, though the message boards have been quiet lately with only 92 posts in the past 30 days. Electro Scientific Industries has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
The company boosted its gross margin by 7.1 percentage points in the last quarter. Revenue rose 31.8% while cost of sales rose 17% to $43.3 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 43.8% 43.9% 44.7% 43.7%
Operating Margin 7.1% 8.1% 3.7% 1.2%
Net Margin 7.7% 8.4% 3.5% (1.0%)
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