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iRobot Corporation (IRBT - Free Report) has been benefiting from its diversified product portfolio coupled with solid demand for products and focus on innovation. In third-quarter 2021, the company’s revenues generated from selling premium and mid-tier robots increased 14% on a year-over-year basis. In the quarter, its product units shipped inched up 0.3% year over year and the average selling price expanded 3.2%.
Going forward, its investments in software related to machine vision technologies, artificial intelligence and home understanding are likely to be beneficial.
The company is poised to gain from its efforts to expand its recurring revenue sources, the direct-to-consumer sales channel and business from the online platform. In the third quarter, revenues from direct sales to consumers increased 13% on a year-over-year basis. For 2021, it expects revenues from direct sales to represent 12-13% of revenues. Also, its investments in building brand awareness are expected to boost product demands in the quarters ahead.
iRobot focuses on rewarding shareholders through share repurchases. During the three months ended Oct 2, 2021, iRobot completed its accelerated share repurchase program worth $100 million (repurchased 1.2 million shares at the rate of $83.46 per share).
However, the company has been experiencing top-line challenges from the tighter availability of semiconductor chips. Supply-chain issues, logistic woes, shipping delays and protracted shipping timeframes are anticipated to negatively impact its fourth-quarter performance. The company expects revenues of $445-$480 million for the fourth quarter, suggesting a decline from $545 million generated in the year-ago quarter.
Escalating costs and expenses have been concerning for the company over the past few quarters. In the third quarter, iRobot’s costs of revenues increased 29.7% year over year to $227.9 million, while its research and development expenses were up 25% to $48.3 million. The company anticipates transportation costs to increase significantly. It expects tariff-related costs to have negative impacts of $13-$14 million for fourth-quarter 2021 and $42-$43 million for 2021.
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In the past three months, this Zacks Rank #3 (Hold) stock has lost 15.1% against the industry’s growth of 11.7%.
Stocks to Consider
Some better-ranked companies from the Zacks Industrial Products sector are discussed below.
Its earnings surprise in the last four quarters was 40.42%, on average.
SPX FLOW’s earnings estimates have increased 8.4% for 2021 and 23.5% for 2022 in the past 60 days. Its shares have gained 16.3% in the past three months.
Rockwell Automation, Inc. (ROK - Free Report) presently carries a Zacks Rank #2 (Buy). Its earnings surprise in the last four quarters was 13.77%, on average.
In the past 60 days, Rockwell’s earnings estimates have increased 5.2% for fiscal 2022 (ending September 2022) and 6.5% for fiscal 2023 (ending September 2023). Its shares have gained 14.7% in the past three months.
Franklin Electric Co., Inc. (FELE - Free Report) presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 16.27%, on average.
Franklin Electric’s earnings estimates have increased 1% for 2021 and 1.5% for 2022 in the past 60 days. Its shares have gained 12% in the past three months.
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iRobot (IRBT) Exhibits Strong Prospects Despite Headwinds
iRobot Corporation (IRBT - Free Report) has been benefiting from its diversified product portfolio coupled with solid demand for products and focus on innovation. In third-quarter 2021, the company’s revenues generated from selling premium and mid-tier robots increased 14% on a year-over-year basis. In the quarter, its product units shipped inched up 0.3% year over year and the average selling price expanded 3.2%.
Going forward, its investments in software related to machine vision technologies, artificial intelligence and home understanding are likely to be beneficial.
The company is poised to gain from its efforts to expand its recurring revenue sources, the direct-to-consumer sales channel and business from the online platform. In the third quarter, revenues from direct sales to consumers increased 13% on a year-over-year basis. For 2021, it expects revenues from direct sales to represent 12-13% of revenues. Also, its investments in building brand awareness are expected to boost product demands in the quarters ahead.
iRobot focuses on rewarding shareholders through share repurchases. During the three months ended Oct 2, 2021, iRobot completed its accelerated share repurchase program worth $100 million (repurchased 1.2 million shares at the rate of $83.46 per share).
However, the company has been experiencing top-line challenges from the tighter availability of semiconductor chips. Supply-chain issues, logistic woes, shipping delays and protracted shipping timeframes are anticipated to negatively impact its fourth-quarter performance. The company expects revenues of $445-$480 million for the fourth quarter, suggesting a decline from $545 million generated in the year-ago quarter.
Escalating costs and expenses have been concerning for the company over the past few quarters. In the third quarter, iRobot’s costs of revenues increased 29.7% year over year to $227.9 million, while its research and development expenses were up 25% to $48.3 million. The company anticipates transportation costs to increase significantly. It expects tariff-related costs to have negative impacts of $13-$14 million for fourth-quarter 2021 and $42-$43 million for 2021.
In the past three months, this Zacks Rank #3 (Hold) stock has lost 15.1% against the industry’s growth of 11.7%.
Stocks to Consider
Some better-ranked companies from the Zacks Industrial Products sector are discussed below.
SPX FLOW, Inc. (FLOW - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Its earnings surprise in the last four quarters was 40.42%, on average.
SPX FLOW’s earnings estimates have increased 8.4% for 2021 and 23.5% for 2022 in the past 60 days. Its shares have gained 16.3% in the past three months.
Rockwell Automation, Inc. (ROK - Free Report) presently carries a Zacks Rank #2 (Buy). Its earnings surprise in the last four quarters was 13.77%, on average.
In the past 60 days, Rockwell’s earnings estimates have increased 5.2% for fiscal 2022 (ending September 2022) and 6.5% for fiscal 2023 (ending September 2023). Its shares have gained 14.7% in the past three months.
Franklin Electric Co., Inc. (FELE - Free Report) presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 16.27%, on average.
Franklin Electric’s earnings estimates have increased 1% for 2021 and 1.5% for 2022 in the past 60 days. Its shares have gained 12% in the past three months.