Are you interested in a small-cap stock that has been growing earnings at a 17.8% annual clip for the last five years? Looking for an interesting superconductor investment that the market ignores? If so, check out IntermagneticsGeneral's (NASDAQ:IMGC) latest quarterly results.

Overall, sales increased 37.8% over the year-ago quarter, on track to exceed the company's prior guidance of 15% sales growth for the entire fiscal year (which ends May 2006). Diluted earnings per share from continuing operations increased 31.3% (factoring out the effects of an acquisition), similarly surpassing guidance for full-year growth in excess of 20%. The robust results are a bit of a surprise; gross margins were expected to fall in the first half of the fiscal year because of a new MRI product line.

The Magnetic Resonance Imaging unit (39.5% of sales; 59.4% of profits) provides superconducting magnets and related devices for MRI systems. Sales for the quarter were up 16.6%, helped by the newly introduced product line.

The Medical Devices subsidiary (56.1% of sales; 40.6% of operating profits) was "reformed" over the last two fiscal years when the company sold its instrument business and acquired two medical-device operations. Now focused on diagnostic imaging and patient-monitoring systems, the division's first-quarter sales were up a whopping 54.1% thanks to the newly acquired units and stronger-than-expected OEM demand. The small 6.4% increase in operating income probably reflects the continued costs of integrating the acquired businesses.

The Energy Technology segment (4.3% of sales; producing losses) is working with high-temperature superconductors (HTS) to find long-term solutions for the reliable transmission and distribution of electrical power. This development-stage operation is years away from meaningful revenue.

There's an interesting technology play at work here. The company's MRI business uses low-temperature superconductors (LTS) in its products. Developing high-temperature superconductors is a logical extension of a core competency, although the target markets -- energy transmission and defense -- would be new.

Contrast that to American Superconductor (NASDAQ:AMSC), a very interesting HTS company that will sink or swim based solely on its ability to commercialize HTS products. Although it has General Electric (NYSE:GE) helping to sell its initial products, American Superconductor isn't expected to be profitable for the foreseeable future.

Let's pause for a reality check here. IBM (NYSE:IBM) ushered in the age of HTS in 1986. As with any breakthrough technology, a lot of research is required, and it takes many years to bring products to market. Among other things, superconductors promise to reduce energy use -- and earn billions, if not more, for successful companies. That goal has attracted many large corporations and universities around the world, all angling for a piece of the market. It's folly, with a small "f," to think that Intermagnetics General has an inside track because of its LTS experience. Furthermore, the company has no shortage of competitors in its medical-devices and MRI businesses.

Nonetheless, Intermagnetics General is a solidly profitable company that is expected to grow earnings by 18% annually for the next five years. The stock sells for a less-than-pricey 21.1 times trailing earnings; it appears that the market is valuing the HTS opportunity at close to zero. If the company commercializes HTS products, its growth potential will greatly exceed today's core operations. That sounds like an interesting opportunity.

Further superconductive Foolishness:

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Fool contributor W.D. Crotty does not own shares in any of the companies mentioned. The Fool has a disclosure policy.