Dril-Quip (NYSE: DRQ) will look to avoid missing estimates for the third consecutive quarter when its earnings are released. The company will unveil its latest earnings Friday. Dril-Quip designs, manufactures, sells, and services highly engineered offshore drilling and production equipment that is suited for use in deepwater, harsh environment, and severe service applications.

What analysts say:

  • Buy, sell, or hold?: Half of analysts think investors should stand pat on Dril-Quip while the remaining half rate the stock as a buy Half of analysts think investors should stand pat on Dril-Quip. Analysts don't like Dril-Quip as much as competitor Lufkin Industries overall. Three out of four analysts rate Lufkin Industries a buy compared with four of eight for Dril-Quip. 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 $140.2 million in revenue this quarter. That would represent a rise of 0% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.58 per share. Estimates range from $0.56 to $0.59.

What our community says:
CAPS All-Stars are solidly behind the stock with 97.1% giving it an "outperform" rating. The community at large agrees with the All-Stars with 94.7% awarding it a rating of "outperform." Fools have embraced Dril-Quip, though the message boards have been quiet lately with only 93 posts in the past 30 days. Despite the majority sentiment in favor of Dril-Quip, the stock has a middling CAPS rating of three out of five stars.

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 41.8% 42.2% 43.3% 44.0%
Operating Margin 22.2% 19.1% 26.9% 27.7%
Net Margin 15.7% 14.7% 19.7% 19.7%

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