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Plantronics (PLT) Beats on Q4 Earnings, Stock Down on Outlook

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Plantronics, Inc. reported healthy fourth-quarter fiscal 2021 results, wherein both the bottom line and the top line beat the respective Zacks Consensus Estimate.

However, this Santa Cruz, CA-based headset maker’s share price fell 20.4% on May 14, closing the trading session at $29.44.

Investors were disappointed because the company said that it will continue experiencing tightness in its supply chain due to the global semiconductor chip shortage. This is expected to hurt Plantronics’ near-term revenues.

The company also stated that while end-market demand remains strong for video and headsets, voice demand is recovering. However, its ability to capitalize on this trend depends on the availability of certain components.

Net Income

On a GAAP basis, net income in the March quarter was $11 million or 25 cents per share against a net loss of $677.9 million or loss of $16.94 per share in the prior-year quarter. The significant improvement was primarily driven by an operating income.

In fiscal 2021, net loss was $57.3 million or loss of $1.40 per share compared with a net loss of $827.2 million or loss of $20.86 per share in fiscal 2020.

Quarterly non-GAAP net income came in at $53.6 million or $1.23 per share compared with $11.9 million or 30 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 30 cents, delivering a surprise of 32.3%.

Plantronics, Inc. Price, Consensus and EPS Surprise Plantronics, Inc. Price, Consensus and EPS Surprise

Plantronics, Inc. price-consensus-eps-surprise-chart | Plantronics, Inc. Quote

Revenues

Quarterly total GAAP revenues grew 18.2% year over year to $476.2 million. The growth was primarily driven by video, which more than doubled to a record high, and professional headsets, which grew 20% from the prior-year quarter. This reflects the massive shift toward reliable, high-fidelity solutions for hybrid work and video collaboration. The top line surpassed the consensus estimate of $450 million.

Product revenues increased 21.5% year over year to $411 million and services revenues inched up 0.7% to $65.2 million. In fiscal 2021, total revenues increased 1.8% year over year to $1,727.6 million.

Quarterly non-GAAP revenues increased 16.8% year over year to $478 million.

Other Quarterly Details

Gross profit improved to $212.8 million from a loss of $10.3 million in the prior-year quarter, with respective margins of 44.7% and -2.6%. Total operating expenses decreased to $178.7 million from $682.6 million, primarily led by lower impairment of goodwill and long-lived assets.  

Operating income came in at $34.1 million, improving from a loss of $693 million a year ago. Adjusted EBITDA improved to $86 million from $60 million.

Cash Flow & Liquidity

In fiscal 2021, Plantronics generated $145.2 million of net cash from operating activities compared with $78 million in fiscal 2020.

As of Apr 3, 2021, the company had $202.6 million in cash and cash equivalents with $1,496.1 million of long-term debt compared with the respective tallies of $213.9 million and $1,621.7 million a year ago. 

Q1 Guidance

For the first quarter of fiscal 2022, Plantronics expects GAAP revenues between $410 million and $430 million. Adjusted EBITDA is anticipated in the range of $50 million to $60 million. Non-GAAP earnings per share are estimated between 35 cents and 55 cents.

Zacks Rank & Stocks to Consider

Plantronics currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader industry are United States Cellular Corporation (USM - Free Report) , Vicor Corporation (VICR - Free Report) and Altice USA, Inc. (ATUS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

U.S. Cellular delivered a trailing four-quarter earnings surprise of 123.9%, on average.

Vicor delivered a trailing four-quarter earnings surprise of 80.6%, on average.

Altice delivered a trailing four-quarter earnings surprise of 61.5%, on average.

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