As most of the firms on Wall Street queue up to report their end-of-year numbers, laser-maker Rofin-Sinar (NASDAQ:RSTI) is once again a step ahead of the pack. The company's fiscal Q1 2007 earnings will be served up bright and early Thursday morning.

What analysts say:

  • Buy, sell, or waffle? Nine analysts follow Rofin-Sinar, with just one "hold"-out keeping the stock from a perfect all-"buy" score.
  • Revenues. On average, they're looking for 10% sales growth, to $105.1 million.
  • Earnings. Profits are predicted to inch up 4% to $0.76 per share.

What management says:
After achieving "records" in order entry, sales, and profits last year, Rofin-Sinar thinks it's poised to do even better in 2007. According to executive chairman of the board Dr. Peter Wirth, the worldwide business environment for lasers remains positive, even though -- as CEO Gunther Braun observed -- "sales to the semiconductor industry softened in the fourth quarter." Dr. Wirth highlighted medical devices and electronics as two industries looking especially attractive to Rofin-Sinar right now.

What management does:
And yet, on a trailing-12-month basis, Rofin-Sinar hit a bit of bump in the road last quarter, as cost of goods sold leapt ahead of sales growth, compressing gross margins and cascading down the income statement to crimp operating and net margins as well.

Margins

6/05

9/05

12/05

3/06

6/06

9/06

Gross

41.2%

40.8%

41.6%

42.6%

43.1%

42.4%

Operating

16.5%

15.7%

17.0%

18.2%

18.7%

18.3%

Net

10.8%

10.1%

10.8%

11.4%

12.0%

11.8%
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:
One quarter's speedbump hasn't fazed Motley Fool Hidden Gems co-analyst Bill Mann, however. Reviewing the company's performance to-date in the semiannual review of all Hidden Gems picks, he places Rofin-Sinar in his "first team" of companies worth buying at today's prices. In addition to the positive trends noted by Dr. Wirth above, Bill says Rofin-Sinar is doing especially well in Asia. And when you consider that profits earned abroad can appreciate greatly (in this era of the declining dollar) once translated into greenbacks, that's a good thing for Rofin-Sinar shareholders.

Definitely something to watch -- but do be aware that last year, Rofin-Sinar's growth was greatest right here in North America. Sales were up 16% versus fiscal 2005, compared to 10% growth in Europe and Asia combined.

For the Fool list of reasons why Bill recommends Rofin-Sinar, just click here to claim a month-long trial of Hidden Gems -- for free.

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For more Foolish musings on Rofin-Sinar, try:

Fool contributor Rich Smith does not own shares of any company named above. II-VI is a Motley Fool Hidden Gems recommendation. The Fool's disclosure policy is laser-sharp.