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iRobot Corporation (IRBT - Free Report) reported better-than-expected results for third-quarter 2021. Its earnings surpassed estimates by 125.68% and sales beat the same by 3.72%.
The company’s adjusted earnings in the reported quarter were $1.67 per share, surpassing the Zacks Consensus Estimate of 74 cents. However, the bottom line declined 35.27% from the year-ago figure of $2.58. The results suffered from supply-chain disruptions, which offset top-line growth.
Tariff costs related to Section 301 adversely impacted earnings by 50 cents in the quarter.
Revenue Details
The company generated revenues of $441 million in the reported quarter, surpassing the Zacks Consensus Estimate of $425 million. On a year-over-year basis, quarterly revenues increased 6.7%, driven by a healthy product demand.
The sales derived from premium and mid-tier robots increased 14% year over year. It accounted for 87% of the company’s total robot revenues.
Sales generated from the e-commerce platform (representing 60% of the reported quarter’s revenues) increased 8% year over year. Notably, the e-commerce platform includes online sources of retailers, the company’s app and website, and e-commerce websites. Direct sales to consumers expanded 13% year over year to $40 million and represented 9.1% of the quarter’s revenues.
Total product units of 1,543 thousand shipped in the quarter reflected a year-over-year increase of 0.3%, while average selling prices grew 3.2%. For vacuum products, revenues of $398 million reflected growth of 7.9% from the year-ago quarter. Units shipped were 1,379 thousand, up 1.8% from the year-ago quarter. Revenues from mopping products decreased 2.3% to $43 million. Units shipped were 164 thousand, down from 184 thousand recorded in the third quarter of 2020.
On a geographical basis, the company sourced 49.1% of its revenues from domestic operations, and the rest came from the international arena. Domestic revenues totaled $216.5 million, reflecting a 5% increase from the year-ago quarter. International revenues grew 8.3% to $224.1 million. International operations gained from a 2% revenue increase in Japan and a 15% rise in EMEA sales.
Margin Profile
In the quarter under review, iRobot’s non-GAAP costs of revenues increased 29.7% year over year to $227.9 million, representing 63.1% of revenues compared with 51.9% in the year-ago quarter. The non-GAAP gross profit was $163 million, down 18.3% year over year, while the adjusted gross margin decreased 1130 basis points to 37%.
Research and development expenses were $48.3 million, up 25% year over year. This accounted for 11% of revenues compared with 9.4% in the year-ago quarter. Selling and marketing expenses increased 17% year over year to $59.1 million. As a percentage of revenues, it reflected 13.4% in the reported quarter compared with 12.2% in the prior-year quarter. General and administrative expenses were $22.7 million, down 20.4% year over year. The figure mirrored 5.2% of the total revenue base compared with 6.9% in the year-earlier quarter.
In the quarter under review, the company recorded adjusted operating earnings of $48 million, down 48.5% from the year-ago quarter. The adjusted operating margin was 10.9% versus 22.5% in the year-ago quarter.
Tariff costs related to Section 301 totaled $14.1 million in the reported quarter. Its impact on the gross and operating margins was (3.2%).
Balance Sheet and Cash Flow
Exiting third-quarter 2021, iRobot had cash and cash equivalents of $218 million, decreasing 47.6% from $415.8 million recorded at the end of second-quarter 2021. Total long-term liabilities were $67.7 million, down 3.1% sequentially.
In the first nine months of 2021, the company used net cash of $90.8 million for its operating activities against a net cash flow of $96.8 million in the year-ago period. Capital used for purchasing property and equipment totaled $25.3 million, increasing 1.1% year over year.
In the first three quarters of 2021, the company repurchased shares worth $150 million.
Outlook
For the rest of 2021, supply-chain issues, logistics woes, shipping delays and protracted shipping timeframes are expected to impact the performance. Transportation costs are expected to increase sharply.
It revised revenue projection to $1.555-$1.590 billion from the previously stated $1.55-$1.62 billion.
The non-GAAP gross profit is expected to be $558-$578 million, lower than $612-$645 million stated previously. The non-GAAP operating income is expected to be $36-$55 million, down from $80-$110 million mentioned previously. The impact of tariff-related costs of Section 301 is expected to be an adverse $42-$43 million on both gross profit and operating income results. The tax rate is expected to be 5-7%.
The company lowered its non-GAAP earnings projection to $1.15-$1.74 per share from the previously mentioned $2.25-$3.15.
iRobot Corporation Price, Consensus and EPS Surprise
In the past 60 days, earnings estimates for the companies improved for the current year. Further, earnings surprise for the last reported quarter was 14.15% for Nordson, 33.90% for HeritageCrystal, and 4.17% for Casella Waste.
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iRobot (IRBT) Beats Q3 Earnings Estimates, Lowers '21 View
iRobot Corporation (IRBT - Free Report) reported better-than-expected results for third-quarter 2021. Its earnings surpassed estimates by 125.68% and sales beat the same by 3.72%.
The company’s adjusted earnings in the reported quarter were $1.67 per share, surpassing the Zacks Consensus Estimate of 74 cents. However, the bottom line declined 35.27% from the year-ago figure of $2.58. The results suffered from supply-chain disruptions, which offset top-line growth.
Tariff costs related to Section 301 adversely impacted earnings by 50 cents in the quarter.
Revenue Details
The company generated revenues of $441 million in the reported quarter, surpassing the Zacks Consensus Estimate of $425 million. On a year-over-year basis, quarterly revenues increased 6.7%, driven by a healthy product demand.
The sales derived from premium and mid-tier robots increased 14% year over year. It accounted for 87% of the company’s total robot revenues.
Sales generated from the e-commerce platform (representing 60% of the reported quarter’s revenues) increased 8% year over year. Notably, the e-commerce platform includes online sources of retailers, the company’s app and website, and e-commerce websites. Direct sales to consumers expanded 13% year over year to $40 million and represented 9.1% of the quarter’s revenues.
Total product units of 1,543 thousand shipped in the quarter reflected a year-over-year increase of 0.3%, while average selling prices grew 3.2%. For vacuum products, revenues of $398 million reflected growth of 7.9% from the year-ago quarter. Units shipped were 1,379 thousand, up 1.8% from the year-ago quarter. Revenues from mopping products decreased 2.3% to $43 million. Units shipped were 164 thousand, down from 184 thousand recorded in the third quarter of 2020.
On a geographical basis, the company sourced 49.1% of its revenues from domestic operations, and the rest came from the international arena. Domestic revenues totaled $216.5 million, reflecting a 5% increase from the year-ago quarter. International revenues grew 8.3% to $224.1 million. International operations gained from a 2% revenue increase in Japan and a 15% rise in EMEA sales.
Margin Profile
In the quarter under review, iRobot’s non-GAAP costs of revenues increased 29.7% year over year to $227.9 million, representing 63.1% of revenues compared with 51.9% in the year-ago quarter. The non-GAAP gross profit was $163 million, down 18.3% year over year, while the adjusted gross margin decreased 1130 basis points to 37%.
Research and development expenses were $48.3 million, up 25% year over year. This accounted for 11% of revenues compared with 9.4% in the year-ago quarter. Selling and marketing expenses increased 17% year over year to $59.1 million. As a percentage of revenues, it reflected 13.4% in the reported quarter compared with 12.2% in the prior-year quarter. General and administrative expenses were $22.7 million, down 20.4% year over year. The figure mirrored 5.2% of the total revenue base compared with 6.9% in the year-earlier quarter.
In the quarter under review, the company recorded adjusted operating earnings of $48 million, down 48.5% from the year-ago quarter. The adjusted operating margin was 10.9% versus 22.5% in the year-ago quarter.
Tariff costs related to Section 301 totaled $14.1 million in the reported quarter. Its impact on the gross and operating margins was (3.2%).
Balance Sheet and Cash Flow
Exiting third-quarter 2021, iRobot had cash and cash equivalents of $218 million, decreasing 47.6% from $415.8 million recorded at the end of second-quarter 2021. Total long-term liabilities were $67.7 million, down 3.1% sequentially.
In the first nine months of 2021, the company used net cash of $90.8 million for its operating activities against a net cash flow of $96.8 million in the year-ago period. Capital used for purchasing property and equipment totaled $25.3 million, increasing 1.1% year over year.
In the first three quarters of 2021, the company repurchased shares worth $150 million.
Outlook
For the rest of 2021, supply-chain issues, logistics woes, shipping delays and protracted shipping timeframes are expected to impact the performance. Transportation costs are expected to increase sharply.
It revised revenue projection to $1.555-$1.590 billion from the previously stated $1.55-$1.62 billion.
The non-GAAP gross profit is expected to be $558-$578 million, lower than $612-$645 million stated previously. The non-GAAP operating income is expected to be $36-$55 million, down from $80-$110 million mentioned previously. The impact of tariff-related costs of Section 301 is expected to be an adverse $42-$43 million on both gross profit and operating income results. The tax rate is expected to be 5-7%.
The company lowered its non-GAAP earnings projection to $1.15-$1.74 per share from the previously mentioned $2.25-$3.15.
iRobot Corporation Price, Consensus and EPS Surprise
iRobot Corporation price-consensus-eps-surprise-chart | iRobot Corporation Quote
Zacks Rank & Stocks to Consider
The company currently has a market capitalization of $2.2 billion and a Zacks Rank #3 (Hold).
Some better-ranked players in the Zacks Industrial Products sector are Nordson Corporation (NDSN - Free Report) , HeritageCrystal Clean, Inc. , and Casella Waste Systems, Inc. (CWST - Free Report) . While Nordson and HeritageCrystal currently sport a Zacks Rank #1 (Strong Buy), Casella Waste carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, earnings estimates for the companies improved for the current year. Further, earnings surprise for the last reported quarter was 14.15% for Nordson, 33.90% for HeritageCrystal, and 4.17% for Casella Waste.