On Wednesday, Daktronics (NASDAQ:DAKT) will release its latest quarterly results. But can the company that's famous for helping professional sports keep score fare well enough to make investors the ultimate winners?

Daktronics is the company behind some of the best-known video and commercial displays in the world, including the Times Square Coca-Cola sign. Increasingly, its high-definition video and lighting displays have played a prominent role at a number of sporting venues. Let's take an early look at what's been happening with Daktronics over the past quarter and what we're likely to see in its quarterly report.

Stats on Daktronics

Analyst EPS Estimate


Year-Ago EPS


Revenue Estimate

$123 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Will Daktronics light up its report this quarter?
Analysts have largely kept their views on Daktronics stable in recent months, keeping long-range earnings projections stable and boosting April-quarter estimates by a single penny per share. The stock, though, Analysts have reined in their expectations of Daktronics' earnings lately, cutting a nickel per share from their April-quarter projections and cutting more than twice that from their full-year consensus for the current year. The stock has done reasonably well, rising about 4% since late February.

Daktronics is looking to rebound from a disappointing report last quarter, in which the company missed revenue estimates by more than 10%. Part of that drop was due to delayed work from the previous quarter, but the company said that those revenues might not get recognized in the just-ended quarter either. Moreover, concerns about lower gross margins on the contracts the company is getting weighed heavily on the shares after the release in February.

Another challenge on the horizon stems from the decision of longtime CEO Jim Morgan to retire by year's end. With Morgan having led the company since 2001, it'll be tough for current Daktronics executive vice president Reece Kurtenbach to fill his shoes going forward, despite Morgan's assurances that Kurtenbach has what it takes to do the job well.

Still, Daktronics continues to see its high-visibility projects take shape. Just last week, the company delivered on two 26.5-foot LED video displays for Wembley Stadium in London. The huge amounts of money that Disney (NYSE:DIS), CBS (NYSE:CBS), and other sports-content delivery companies are spending for content have left sports-franchise owners with increasing amounts of revenue, supporting capital investments from owners and stadium operators to go toward state-of-the-art display equipment.

In Daktronics' report, be sure to look at how the company compares to results that industrial-lighting and display competitor LSI Industries (NASDAQ:LYTS) announced late last month. Even with a 5% gain in revenue for its March quarter, LSI posted a loss, showing the difficulty in producing high-margin business in the industry. For its part, if Daktronics can keep pushing past its operational challenges, it should be in better position to stay profitable both this quarter and well into the future.

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