Energy Recovery (Nasdaq: ERII) reported earnings on July 31. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended June 30 (Q2), Energy Recovery beat expectations on revenues and exceeded expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank significantly. GAAP earnings per share dropped to a loss.

Gross margins grew, operating margins dropped, net margins shrank.

Revenue details
 Energy Recovery chalked up revenue of $8.6 million. The five analysts polled by S&P Capital IQ expected sales of $8.0 million on the same basis. GAAP reported sales were 30% lower than the prior-year quarter's $12.3 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.

EPS details
 EPS came in at -$0.03. The six earnings estimates compiled by S&P Capital IQ predicted -$0.06 per share. GAAP EPS were -$0.03 for Q2 against $0.01 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.

Margin details
 For the quarter, gross margin was 61.6%, 740 basis points better than the prior-year quarter. Operating margin was -14.9%, much worse than the prior-year quarter. Net margin was -17.0%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
 Next quarter's average estimate for revenue is $10.5 million. On the bottom line, the average EPS estimate is -$0.03.

Next year's average estimate for revenue is $44.2 million. The average EPS estimate is -$0.14.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Energy Recovery is hold, with an average price target of $3.82.

Looking for alternatives to Energy Recovery? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.