Back to top

Analyst Blog

Novatel Wireless Inc. (NVTL - Analyst Report) has decided to restructure its businesses. Management stated that the company is witnessing growing overlap of operations in its Mobile Computing and M2M business segments.

The proposed restructuring will streamline the research and development costs and consolidate manufacturing process of these two lines of operations. Novatel’s aim is to achieve long-term profitability by capitalizing on synergies in its target markets.

The restructuring process will reduce the total headcount by approximately 75 to 80. At the end of the second quarter of 2013, Novatel had a total workforce of 403. The business overhaul process will be completed by the mid or end of Oct. 2013. 

Novatel will incur a pre-tax restructuring charge of $3.2 - $3.4 million predominantly in the ensuing third quarter of 2013. On the other hand, the restructuring process is expected to result in a pre-tax savings of $10 - $11 million per annum from the fourth quarter of 2013.

Novatel currently serves three large nationwide U.S. wireless operators, namely,  Verizon Communications Inc. (VZ - Analyst Report), AT&T Inc. (T - Analyst Report) and Sprint Corp. (S - Analyst Report). Verizon will soon launch MiFi 4620 LE with an extended battery pack. AT&T is using the MiFi 2 products.

Recently, Novatel introduced MiFi 500 LTE with Sprint. Management reaffirms that its revenue for the ensuing third quarter of 2013 will be in the range of $90 million - $100 million.

We anticipate increasing competition for Novatel’s MiFi product line. Several latest versions of smartphones have inbuilt WiFi capability. Low-cost Asian manufacturers have already launched their own version of intelligent mobile hot spots creating competitive pressure on the company. Novatel currently has a Zacks Rank #3 (Hold).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SUPER MICRO… SMCI 27.00 +10.25%
CANADIAN SO… CSIQ 38.34 +8.18%
BANCO DO BR… BDORY 16.78 +8.05%
CENTURY ALU… CENX 26.97 +7.97%
WILLDAN GRO… WLDN 11.38 +5.86%