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Mercury Systems (MRCY - Free Report) reported first-quarter fiscal 2021 non-GAAP earnings of 51 cents per share, beating the Zacks Consensus Estimate by 8.5%. The figure jumped 13.3% year over year.
Revenues of $205.6 million also surpassed the consensus mark by 3.1% and grew 16% year over year on robust organic growth.
Quarterly Details
Organic revenues (96% of total revenues) grew 12% to $196.8 million in the reported quarter.
Moreover, acquired revenues (4% of total revenues) of $8.8 million soared from the $0.9 million reported in the year-ago quarter, primarily attributable to the acquisition of American Panel Corporation.
Mercury Systems Inc Price, Consensus and EPS Surprise
Mercury's total bookings at the end of the fiscal first quarter came in at $200.7 million, reflecting a 0.98 book-to-bill ratio. The company ended the quarter with a backlog of $826.1 million, up $114.3 million year over year. Within the next 12 months, $516.1 million worth of products from this backlog of orders are expected to be shipped.
Operating Details
Gross margin in the fiscal first quarter shrunk 130 basis points (bps) year over year to 42.9%.
Adjusted EBITDA grew 16.6% year over year to $42.8 million. Also, adjusted EBITDA margin expanded 10 bps year on year to 20.8%.
Selling, general & administrative expenses as a percentage of revenues shrunk 90 bps year over year to 16%.
However, research & development expenses as a percentage of revenues expanded 100 bps to 13.3%.
Operating margin contracted 80 bps year on year to 9.1%.
Balance Sheet and Cash Flow
Mercury had cash and cash equivalents of $239.1 million as of Oct 2, 2020, up from the $226.8 million witnessed at the end of the previous quarter.
The company generated $22.9 million of cash flow from operating activities. Free cash flow was $12 million.
Guidance
For the second quarter of fiscal 2021, revenues are projected at $200-$210 million.
Adjusted EBITDA is anticipated in the band of $42-$44 million. Adjusted earnings are estimated to be 48-51 cents per share.
Mercury raised the lower end of its full-year revenue guidance to $865-$885 million from $860-$885 million.
The Adjusted EBITDA forecast has also been raised to $190-$196 million from the $188-$196 million projected earlier. Adjusted earnings are now estimated to be $2.20-$2.28 per share, up from the previous expectation of $2.15-$2.26 per share.
The long-term earnings growth rate for NVIDIA, Sapiens and STMicroelectronics is currently pegged at 20.1%, 5%, and 5%, respectively.
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With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
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Image: Bigstock
Mercury (MRCY) Surpasses Q1 Earnings & Revenue Estimates
Mercury Systems (MRCY - Free Report) reported first-quarter fiscal 2021 non-GAAP earnings of 51 cents per share, beating the Zacks Consensus Estimate by 8.5%. The figure jumped 13.3% year over year.
Revenues of $205.6 million also surpassed the consensus mark by 3.1% and grew 16% year over year on robust organic growth.
Quarterly Details
Organic revenues (96% of total revenues) grew 12% to $196.8 million in the reported quarter.
Moreover, acquired revenues (4% of total revenues) of $8.8 million soared from the $0.9 million reported in the year-ago quarter, primarily attributable to the acquisition of American Panel Corporation.
Mercury Systems Inc Price, Consensus and EPS Surprise
Mercury Systems Inc price-consensus-eps-surprise-chart | Mercury Systems Inc Quote
Mercury's total bookings at the end of the fiscal first quarter came in at $200.7 million, reflecting a 0.98 book-to-bill ratio. The company ended the quarter with a backlog of $826.1 million, up $114.3 million year over year. Within the next 12 months, $516.1 million worth of products from this backlog of orders are expected to be shipped.
Operating Details
Gross margin in the fiscal first quarter shrunk 130 basis points (bps) year over year to 42.9%.
Adjusted EBITDA grew 16.6% year over year to $42.8 million. Also, adjusted EBITDA margin expanded 10 bps year on year to 20.8%.
Selling, general & administrative expenses as a percentage of revenues shrunk 90 bps year over year to 16%.
However, research & development expenses as a percentage of revenues expanded 100 bps to 13.3%.
Operating margin contracted 80 bps year on year to 9.1%.
Balance Sheet and Cash Flow
Mercury had cash and cash equivalents of $239.1 million as of Oct 2, 2020, up from the $226.8 million witnessed at the end of the previous quarter.
The company generated $22.9 million of cash flow from operating activities. Free cash flow was $12 million.
Guidance
For the second quarter of fiscal 2021, revenues are projected at $200-$210 million.
Adjusted EBITDA is anticipated in the band of $42-$44 million. Adjusted earnings are estimated to be 48-51 cents per share.
Mercury raised the lower end of its full-year revenue guidance to $865-$885 million from $860-$885 million.
The Adjusted EBITDA forecast has also been raised to $190-$196 million from the $188-$196 million projected earlier. Adjusted earnings are now estimated to be $2.20-$2.28 per share, up from the previous expectation of $2.15-$2.26 per share.
Zacks Rank & Stocks to Consider
Mercury currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include NVIDIA Corporation (NVDA - Free Report) , Sapiens International Corporation N.V. (SPNS - Free Report) and STMicroelectronics N.V. (STM - Free Report) , all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term earnings growth rate for NVIDIA, Sapiens and STMicroelectronics is currently pegged at 20.1%, 5%, and 5%, respectively.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, SherazMian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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