It has been about a month since the last earnings report for Trimble Navigation (TRMB Quick QuoteTRMB - Free Report) . Shares have added about 17.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Trimble due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Trimble Q3 Earnings Match Estimates

Trimble reported third-quarter 2022 non-GAAP earnings of 66 cents per share, which matched the Zacks Consensus Estimate. The bottom line also matched the year-ago quarter’s figure but rose 3.1% sequentially.

TRMB’s revenues of $884.9 million missed the Zacks Consensus Estimate by 2.8%. Also, the figure was down 1.8% year over year and 6% sequentially.

The top-line decrease was attributed to declining product and services revenues. Also, weak momentum across geospatial and transportation segments negatively impacted the quarterly performance.

Softening demand in Europe, macroeconomic headwinds, and supply-chain constraints remained overhangs.

However, strong momentum across the building and infrastructure, and resources and utilities segments drove the quarterly revenues.

TRMB generated annualized recurring revenues of $1.55 billion in the reported quarter, which increased 13% on a year-over-year basis.

Top Line in Detail

Product revenues (accounting for 57% of total revenues) summed $503.9 million, down 8.6% on a year-over-year basis. Subscription revenues (25%) increased 17% from the year-ago quarter’s level to $222.7 million. Services revenues (18%) of $158.3 million dipped 1% from the year-ago quarter’s reported figure.

Trimble operates under the following four organized segments:

Buildings and Infrastructure: The segment generated revenues of $363.6 million (accounting for 41% of total revenues), which increased 4% on a year-over-year basis. The rise in revenues was driven by strong growth at e-Builder, Viewpoint, SketchUp and civil construction.

Geospatial: This segment generated revenues of $184.2 million (21% of total revenues), which fell 10.3% from the prior-year quarter’s level. The segment was affected by reduced hardware sales and supply-chain constraints.

Resources and Utilities: This segment generated revenues of $191.7 million (22% of total revenues), up 3.7% from the prior-year quarter’s level. Higher revenues were attributed to healthy agricultural markets. Also, strong growth in positioning services remained positive.

Transportation: The segment generated revenues of $145.4 million (accounting for 16% of total revenues), which dropped 10% on a year-over-year basis. The segment’s revenues were down due to reduced hardware sales in North America.

Operating Details

For the third quarter, non-GAAP gross margin came in at 60.9%, expanding 220 basis points (bps) year over year.

On a non-GAAP basis, operating expenses accounted for 37.1% of revenues and expanded 220 bps from the year-ago quarter’s figure.

Non-GAAP operating margin came in at 23.7%, which contracted 10 bps year over year.

Balance Sheet

At the end of third-quarter 2022, cash and cash equivalents were $308.7 million, down from $350.1 million at the end of second-quarter 2022.

Accounts receivables were $566.1 million in the reported quarter, decreasing from $589.3 million in the prior quarter.

Total debt was $1.59 billion at the third-quarter end compared with $1.29 billion at the second-quarter end.

Guidance

For 2022, Trimble lowered its guidance for revenues from $3.76-$3.82 billion to $3.67-$3.72 billion.

Trimble also decreased 2022 non-GAAP earnings per share from $2.70-$2.80 to $2.61-$2.67.

Management expects its non-GAAP tax rate of 18.3% for 2022.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -16.39% due to these changes.

VGM Scores

Currently, Trimble has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Trimble has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Trimble is part of the Zacks Electronics - Miscellaneous Products industry. Over the past month, Carrier Global (CARR Quick QuoteCARR - Free Report) , a stock from the same industry, has gained 14.1%. The company reported its results for the quarter ended September 2022 more than a month ago.

Carrier Global reported revenues of $5.45 billion in the last reported quarter, representing a year-over-year change of +2.1%. EPS of $0.70 for the same period compares with $0.71 a year ago.

For the current quarter, Carrier Global is expected to post earnings of $0.40 per share, indicating a change of -9.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.9% over the last 30 days.

Carrier Global has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.