It's been a busy past few months for robo-meister iRobot (NASDAQ:IRBT), with two new products (that we know of) introduced so far this year. Will either one help return this company to profitability, and balance out last quarter's sad loss? Analysts think it's unlikely, but we'll have to wait until Wednesday afternoon to learn the full extent of the damage.

What analysts say:

  • Buy, sell, or waffle? Eight analysts follow iRobot; they give it five buy ratings and three holds.
  • Revenues. On average, they're looking for sales to stay flat at $38.4 million.
  • Earnings. Quarterly per-share losses are expected to be more than twice last year's $0.12.

What management says:
CEO Colin Angle pronounced himself both "pleased" and "proud" with iRobot's 33% sales growth and 38% profits growth last year -- but with the stock down 23% since Q4 earnings, it's safe to say that investors are less pleased. Angle also said he's "excited" about growth prospects in 2007 and beyond, even though annual sales are expected to top out no more than 24% higher than in 2006, and net income is likely to decline from last year's $3.6 million.

Hard to find much excitement in those numbers. But with everyone from Toyota (NYSE:TM) to Honda (NYSE:HMC) to Intuitive Surgical (NASDAQ:ISRG) getting into the robot game, the concept of robotics clearly retains its ability to excite.

What management does:
The trouble at iRobot, it seems, is not the sales of which Angle boasts, or the gross margins that result as the company gains scale. On the contrary, rolling gross margins have increased for 18 months straight. Where the story goes askew is at the levels of operating and net profits, which bobble back and forth but seem incapable of gaining the traction needed to move upward.

Margins

10/05

12/05

4/06

7/06

9/06

12/06

Gross

31.2%

33.6%

34.2%

35.7%

36.6%

37.2%

Operating

2.4%

1.9%

2.0%

2.4%

2.4%

1.4%

Net

2.3%

1.8%

2.3%

3.0%

3.1%

1.9%
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
So let's review the trend, shall we? Sales were up 33% last year but only 31% in the fourth quarter -- suggestive of a deceleration as the year progressed. On Wednesday, we're looking for a total lack of sales growth (if the analysts are to be believed -- they totally blew the call on both sales and earnings last quarter), followed by full-year sales decelerating to 24% growth at most, and perhaps as little as 19%. (These figures come straight from management.) Doesn't read much like a growth story, now, does it?

Perusing these same numbers, the Motley Fool Rule Breakers team opined in March: "It's possible that the Roomba's popularity has peaked, and we'd like to see the company roll out new products more quickly, but we continue to think that robotics is an important growth industry. The company is expecting to enter a third category of robotic products later this year (it's not saying what), which is one silver lining. That may not soothe near-term worries or do much for shares in the coming weeks, but we still believe." To read the rest of our team's comments on iRobot's fourth quarter, take a free, 30-day trial of the service, and receive unlimited access to our archives, where iRobot and Intuitive Surgical have both been recommended to our readers.

Well, we've got the new products rolling out -- two in the past three months: the "Create" robotic tinker toy, and the Verro pool-cleaning robot, which appears to be a collaborative effort among iRobot, AquaJet, and Aquatron. Now let's see whether they sell.

intuitive Surgical and iRobot are Rule Breakers selections.

Fool contributor Rich Smith owns shares of iRobot. The Motley Fool has a disclosure policy.