Distribution channels are key to many companies and when those lines are severed or blocked for any reason it always negatively impacts the company’s bottom line. This is the case for our Zacks Bear of the Day, Blackhawk Network Solutions (HAWK - Free Report) . While several of the channels have been reopened, and a few are in the process of meeting compliance issues, getting back to where they were before the issues arose will take a bit of time.
This Zacks Rank #5 (Strong Sell) company is a provider of prepaid and financial payments products for consumers and businesses. The company distributes gift cards, prepaid handsets and prepaid financial services products. Blackhawk Network Holdings, Inc. is headquartered in Pleasanton, California.
Recent Earnings Data
Blackhawk reported Q3 16 earnings data on October 11th, and they saw year over year losses in the following areas; Net Income -42%, Diluted EPS -29%, Adjusted operating revenues -5%, Adjusted EBITDA -7%, Adjusted net income -20%, Adjusted diluted EPS -18%.
According to Jerry Ulrich, CFO, “GAAP net loss increased 41% in the third quarter of 2016 primarily due to the EMV impact on revenues along with increased acquisition related expenses, including interest expense on increased borrowings. Adjusted EBITDA declined 7% for total Blackhawk. For the U.S. retail segment, operating profit and adjusted EBITDA declined 18% and 17%, respectively, during the third quarter of 2016 reflecting the impact of EMV. The shortfall in Cardpool revenues had minimal impact on net loss and adjusted EBITDA. Segment operating profit and adjusted EBITDA growth in the international segment was 28% and 33%, respectively, and 99% and 53%, respectively, in the incentives segment. Growth in adjusted corporate and unallocated expenses was limited to 5% during the third quarter.”
Price and Consensus Graph
As you can see in the graph below, the company’s future earnings estimates have dropped significantly after their last earnings report.