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Plantronics (POLY) Beats on Q3 Earnings Despite Soft Revenues
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Plantronics, Inc. reported mixed third-quarter fiscal 2022 results, wherein the bottom line beat the Zacks Consensus Estimate, but the top line missed the same owing to supply chain woes. Despite global supply chain headwinds, including semiconductor chip shortages and transportation constraints, Poly (the name under which Plantronics markets itself) remains focused on managing its profitability while investing in areas of accelerating growth.
Net Income
On a GAAP basis, net loss in the quarter was $11.2 million or a loss of 26 cents per share against a net income of $20.1 million or 48 cents per share in the prior-year quarter. The significant decline in the bottom line was primarily attributable to top-line contraction.
Non-GAAP earnings in the reported quarter were 57 cents per share compared with $1.47 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by a couple of cents.
Plantronics, Inc. Price, Consensus and EPS Surprise
Quarterly GAAP revenues declined 15.5% to $409.6 million from $484.7 million as supply chain constraints triggered by acute chip shortage increased backlog of products amid solid demand trends. Product revenues were down 15.9% to $354 million, while Services revenues decreased 13.2% to $55.5 million due to the shift from legacy goods to easy-to-install and less complex products with optional service contracts. The top line, however, missed the consensus estimate of $432 million.
The demand environment remained strong as businesses prepared for return to office by modernizing their communications infrastructure. However, sales of each of the major product categories declined year over year across all regions. Order backlog increased primarily due to supply-chain constraints, which also impacted services revenues. Quarterly non-GAAP revenues were $410.5 million, down from $488 million a year ago.
Other Details
GAAP gross profit declined to $164.2 million from $226.7 million in the prior-year quarter, with respective margins of 40.1% and 46.8%. GAAP operating loss aggregated $5.8 million against operating income of $28.9 million a year ago. Adjusted EBITDA declined to $47.3 million from $99.8 million.
Cash Flow & Liquidity
During the first nine months of fiscal 2022, Poly utilized $0.05 million of cash from operating activities against a cash generation of $71.1 million in the prior-year period. As of Jan 1, 2022, the company had $182.7 million in cash and cash equivalents with $1,499.2 million of long-term debt.
Outlook
Poly expects to continue experiencing tightness and volatility in its supply chain, which could compromise near-term visibility. For fiscal 2022, the company expects GAAP revenues between $1.67 billion and $1.7 billion. Adjusted EBITDA is anticipated in the range of $220 million to $230 million. Non-GAAP earnings per share are estimated between $2.45 and $2.65.
Zacks Rank & Stocks to Consider
Poly currently carries a Zacks Rank #3 (Hold).
Vocera Communications, Inc. , sporting a Zacks Rank #1 (Strong Buy), is a solid pick for investors. It has a long-term earnings growth expectation of 18% and delivered a stellar earnings surprise of 109.6%, on average, in the trailing four quarters.
Over the past year, Vocera has gained 82.3%. It offers an all-inclusive digital platform for hands-free communication via secure text messaging, alert and alarm management. This, in turn, augments clinical workflow by enabling the interoperability of the solution with a significant number of clinical and operational systems used in hospitals today.
Viavi Solutions Inc. (VIAV - Free Report) carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. It delivered a modest earnings surprise of 15.6%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 6% since February 2021, while that for the next year is up 4.6%.
Viavi boasts a comprehensive product portfolio that offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks. Its wireless and fiber test solutions are in the early stages of a multi-year investment cycle fueled by the transition of OEMs and service providers to superfast 5G networks. Viavi expects growth to be driven by the secular demand for 5G wireless, fiber and 3D sensing.
Arista Networks, Inc. (ANET - Free Report) carries a Zacks Rank #2. It has a long-term earnings growth expectation of 16.7% and delivered a modest earnings surprise of 6%, on average, in the trailing four quarters. Earnings estimates for the current year have moved up 10.7% since February 2021, while that for the next year is up 24.7%.
Arista continues to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Over the past year, Arista has gained 54.2%.
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Plantronics (POLY) Beats on Q3 Earnings Despite Soft Revenues
Plantronics, Inc. reported mixed third-quarter fiscal 2022 results, wherein the bottom line beat the Zacks Consensus Estimate, but the top line missed the same owing to supply chain woes. Despite global supply chain headwinds, including semiconductor chip shortages and transportation constraints, Poly (the name under which Plantronics markets itself) remains focused on managing its profitability while investing in areas of accelerating growth.
Net Income
On a GAAP basis, net loss in the quarter was $11.2 million or a loss of 26 cents per share against a net income of $20.1 million or 48 cents per share in the prior-year quarter. The significant decline in the bottom line was primarily attributable to top-line contraction.
Non-GAAP earnings in the reported quarter were 57 cents per share compared with $1.47 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by a couple of cents.
Plantronics, Inc. Price, Consensus and EPS Surprise
Plantronics, Inc. price-consensus-eps-surprise-chart | Plantronics, Inc. Quote
Revenues
Quarterly GAAP revenues declined 15.5% to $409.6 million from $484.7 million as supply chain constraints triggered by acute chip shortage increased backlog of products amid solid demand trends. Product revenues were down 15.9% to $354 million, while Services revenues decreased 13.2% to $55.5 million due to the shift from legacy goods to easy-to-install and less complex products with optional service contracts. The top line, however, missed the consensus estimate of $432 million.
The demand environment remained strong as businesses prepared for return to office by modernizing their communications infrastructure. However, sales of each of the major product categories declined year over year across all regions. Order backlog increased primarily due to supply-chain constraints, which also impacted services revenues. Quarterly non-GAAP revenues were $410.5 million, down from $488 million a year ago.
Other Details
GAAP gross profit declined to $164.2 million from $226.7 million in the prior-year quarter, with respective margins of 40.1% and 46.8%. GAAP operating loss aggregated $5.8 million against operating income of $28.9 million a year ago. Adjusted EBITDA declined to $47.3 million from $99.8 million.
Cash Flow & Liquidity
During the first nine months of fiscal 2022, Poly utilized $0.05 million of cash from operating activities against a cash generation of $71.1 million in the prior-year period. As of Jan 1, 2022, the company had $182.7 million in cash and cash equivalents with $1,499.2 million of long-term debt.
Outlook
Poly expects to continue experiencing tightness and volatility in its supply chain, which could compromise near-term visibility. For fiscal 2022, the company expects GAAP revenues between $1.67 billion and $1.7 billion. Adjusted EBITDA is anticipated in the range of $220 million to $230 million. Non-GAAP earnings per share are estimated between $2.45 and $2.65.
Zacks Rank & Stocks to Consider
Poly currently carries a Zacks Rank #3 (Hold).
Vocera Communications, Inc. , sporting a Zacks Rank #1 (Strong Buy), is a solid pick for investors. It has a long-term earnings growth expectation of 18% and delivered a stellar earnings surprise of 109.6%, on average, in the trailing four quarters.
Over the past year, Vocera has gained 82.3%. It offers an all-inclusive digital platform for hands-free communication via secure text messaging, alert and alarm management. This, in turn, augments clinical workflow by enabling the interoperability of the solution with a significant number of clinical and operational systems used in hospitals today.
Viavi Solutions Inc. (VIAV - Free Report) carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. It delivered a modest earnings surprise of 15.6%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 6% since February 2021, while that for the next year is up 4.6%.
Viavi boasts a comprehensive product portfolio that offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks. Its wireless and fiber test solutions are in the early stages of a multi-year investment cycle fueled by the transition of OEMs and service providers to superfast 5G networks. Viavi expects growth to be driven by the secular demand for 5G wireless, fiber and 3D sensing.
Arista Networks, Inc. (ANET - Free Report) carries a Zacks Rank #2. It has a long-term earnings growth expectation of 16.7% and delivered a modest earnings surprise of 6%, on average, in the trailing four quarters. Earnings estimates for the current year have moved up 10.7% since February 2021, while that for the next year is up 24.7%.
Arista continues to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Over the past year, Arista has gained 54.2%.