It has been about a month since the last earnings report for Plantronics . Shares have lost about 4.2% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Plantronics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Plantronics Beats on Q3 Earnings Despite Soft Revenues
Plantronics 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.
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.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 16% due to these changes.
VGM Scores
Currently, Plantronics has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Plantronics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Plantronics (POLY) Down 4.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Plantronics . Shares have lost about 4.2% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Plantronics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Plantronics Beats on Q3 Earnings Despite Soft Revenues
Plantronics 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.
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.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 16% due to these changes.
VGM Scores
Currently, Plantronics has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Plantronics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.