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TESSCO Technologies Inc.
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TESSCO Technologies provides integrated product and supply chain solutions that are necessary to design, build, run, maintain, and use wireless systems. The company offers mobile and fixed-wireless network infrastructure products, mobile devices/accessories and installation, test and maintenance equipment and supplies.
Inaugural Dividend
The company recently declared its first-ever quarterly dividend of 10 cents per share, noting that it is payable on August 26 to holders of record on August 12.
The new dividend translates into an industry-leading yield of 3%.
Stellar Results
TESSCO Technologies announced fiscal first-quarter earnings of 38 cents per share, which was on par with the year-prior total and ahead of the Zacks Consensus Estimate by an impressive 124%. Revenues slipped from last year’s $122.1 million to $108.8 million.
Management referred to the quarter as a strong one that saw increased earnings per share, strong operating cash flows and a solid balance sheet.
The company said it improved its gross and operating margins, kept expenses at a steady state, and ended the quarter with $4.4 million of cash and no outstanding balance on its revolving credit facility. TESSCO’s operating margin rose to its highest level in five years.
Bullish Forecasts
Encouraged by first-quarter results, the company hiked its fiscal year earnings guidance to a range of $1.15 to $1.40 per share.
The Zacks Consensus Estimate stands at $1.31 per share for the year ending May 2010, versus last month’s $1.22.
Strong Fundamentals
The company’s return on equity (ROE) of 10% tops the industry average of 4%. Its net profit margin of 1% compares to a negative industry average. TESSCO’s earnings per share are expected to grow about 15% over the next 3 – 5 years, which is in line with the industry average.
Read the full analyst report on TESS
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