Shares of II-VI (NASDAQ:IIVI) continued to sink for a second day Wednesday, down 5% as of this writing. Are investors taking too dim a view of the laser-components maker? Today, we shine a spotlight on a few problems. But first …

The good news
On the surface, at least, II-VI's report practically glowed with good news. In its first fiscal quarter of 2009, II-VI:

  • Grew its sales by 23%.
  • Expanded its operating margin 80 basis points to 20.3%, roughly twice the level of profitability that rival Rohm & Haas (NYSE:ROH) achieved. That was also better than laser-industry rivals Rofin-Sinar (NASDAQ:RSTI) and Coherent (NASDAQ:COHR) -- and better, indeed, than just about anybody other than IPG Photonics (NASDAQ:IPGP).
  • Boosted its earnings by an incredible 78%, to $17.5 million, or $0.17 per share.

Now, the bad news
On the minus side of the ledger, it looks like the good times may soon stop rolling for II-VI.  "Bookings from continuing operations" -- i.e., new orders -- declined 8% year over year. Relative to the huge spikes in sales that we've become accustomed to seeing at II-VI, that suggests a marked slowdown in sales growth ahead.

So does the latest guidance. II-VI expects to make about $84 million in sales this current quarter, and earn $0.40 per share on them. Over the course of the year, it's aiming for total sales of about $345 million, and $1.84 per share in profits. That seems a little lower on both sales and earnings than what Wall Street expected in Q2.

And finally, the downright ugly news
Remember how II-VI said it "earned" $17.5 million in Q1? Not quite. To the contrary, CFO Craig Creaturo admitted in the post-earnings conference call that II-VI "consumed $5 million of cash during the quarter." Crunching the numbers, I take that to mean II-VI had net use of cash -- of course, I have to guess at this, because management once again failed to provide a cash flow statement in its release.

IV more IV-I-I on II-VI, read:

Fool contributor Rich Smith owns no shares of any company named above. Rofin-Sinar Technologies is a Motley Fool Hidden Gems recommendation. IPG Photonics is a Motley Fool Rule Breakers pick. The Fool owns shares of IPG Photonics and has a disclosure policy.