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Why Is Trimble (TRMB) Down 2.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for Trimble Navigation (TRMB - Free Report) . Shares have lost about 2.8% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Trimble due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Trimble Q4 Earnings & Revenues Beat Estimates
Trimble reported fourth-quarter 2021 non-GAAP earnings of 62 cents per share, which beat the Zacks Consensus Estimate by 1.6%. The bottom line improved 1.6% year over year but declined 6.1% sequentially.
The company’s revenues were $926 million, which surpassed the Zacks Consensus Estimate by 4.1%. Also, the figure was up 11.6% year over year and 2.7% sequentially.
The top line was driven by an increase in product and subscription revenues. Further, solid momentum across buildings & infrastructure, geospatial, and resources & utilities segments aided the results. Additionally, the acquisition of AgileAssets added strength to Trimble’s portfolio of civil infrastructure software solutions. This remained a positive. Yet, supply chain challenges remained a headwind for the company.
Top Line in Detail
Product revenues (accounting for 61% of revenues) totaled $562 million, up 14.6% on a year-over-year basis. Subscription revenues (21%) increased 14.2% from the year-ago quarter to $198.9 million. Services revenues (18%) of $165.1 million were in line with the year-ago reported figure.
Trimble reports revenues on the basis of four types —
Hardware revenues (accounting for 45% of revenues) amounted to $418.4 million, up 20.2% year over year. Software revenues (16%) were $143.7 million, reflecting an improvement of 0.9% from the year-ago period. Recurring revenues (35%) increased 7.4% from the year-ago quarter to $322.3 million. Professional Service and Other revenues (4%) totaled $41.6 million, up 6.4% year over year.
Trimble operates under the following four organized segments —
Buildings and Infrastructure: The segment generated revenues of $365.1 million (accounting for 39% of total revenues), which increased 13.6% on a year-over-year basis. Despite continued supply chain challenges, revenue growth in civil construction was strong in all regions served. Also, growth in recurring software bookings in the software business remained a tailwind.
Geospatial: This segment generated revenues of $222.1 million (24% of total revenues), which grew 14.8% from the prior-year quarter. The growth was driven by continued strong demand across all major regions and end markets, partially offset by supply chain challenges.
Resources and Utilities: This segment generated revenues of $183.8 million (20% of total revenues), which increased 18.4% from the prior-year quarter. The increase in revenues was attributed to healthy agricultural markets. Also, strong growth in positioning services remained a positive. Yet, the segment revenues were affected by supply chain constraints.
Transportation: The segment generated revenues of $155 million (accounting for 17% of total revenues), which declined 2.9% on a year-over-year basis. The segment was severely impacted by supply chain constraints. Nonetheless, subscription growth resulted in increasing enterprise revenues. This remained a positive for the segment.
Operating Details
For the fourth quarter, non-GAAP gross margin came in at 57.8%, contracting 160 basis points (bps) year over year.
As a percentage of revenues, adjusted EBITDA contracted 200 bps year over year to 24.1%.
On a non-GAAP basis, operating expenses accounted for 35.8% of revenues and expanded 10 bps from the year-ago quarter.
Consequently, non-GAAP operating margin came in at 22.1%, which contracted 160 bps year over year.
Balance Sheet & Cash Flow
At the end of fourth-quarter 2021, cash and cash equivalents were $325.7 million, down from $513.2 million at the end of third-quarter 2021.
Accounts receivables were reported at $624.8 million, which increased from $580.5 million in the third quarter.
Total debt was $1.29 billion at fourth quarter-end compared with $1.32 billion at third quarter-end.
The company generated $155.3 million of cash from operations compared with $166.4 million in the third quarter. It generated free cash flow of $140.6 million for the reported quarter.
Guidance
For full-year 2022, Trimble expects revenues between $3.95 billion and $4.05 billion. Also, the company anticipates non-GAAP earnings per share for 2022 in the range of $2.75-$2.95.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Trimble has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Trimble 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 Trimble (TRMB) Down 2.8% Since Last Earnings Report?
It has been about a month since the last earnings report for Trimble Navigation (TRMB - Free Report) . Shares have lost about 2.8% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Trimble due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Trimble Q4 Earnings & Revenues Beat Estimates
Trimble reported fourth-quarter 2021 non-GAAP earnings of 62 cents per share, which beat the Zacks Consensus Estimate by 1.6%. The bottom line improved 1.6% year over year but declined 6.1% sequentially.
The company’s revenues were $926 million, which surpassed the Zacks Consensus Estimate by 4.1%. Also, the figure was up 11.6% year over year and 2.7% sequentially.
The top line was driven by an increase in product and subscription revenues. Further, solid momentum across buildings & infrastructure, geospatial, and resources & utilities segments aided the results. Additionally, the acquisition of AgileAssets added strength to Trimble’s portfolio of civil infrastructure software solutions. This remained a positive. Yet, supply chain challenges remained a headwind for the company.
Top Line in Detail
Product revenues (accounting for 61% of revenues) totaled $562 million, up 14.6% on a year-over-year basis. Subscription revenues (21%) increased 14.2% from the year-ago quarter to $198.9 million. Services revenues (18%) of $165.1 million were in line with the year-ago reported figure.
Trimble reports revenues on the basis of four types —
Hardware revenues (accounting for 45% of revenues) amounted to $418.4 million, up 20.2% year over year. Software revenues (16%) were $143.7 million, reflecting an improvement of 0.9% from the year-ago period. Recurring revenues (35%) increased 7.4% from the year-ago quarter to $322.3 million. Professional Service and Other revenues (4%) totaled $41.6 million, up 6.4% year over year.
Trimble operates under the following four organized segments —
Buildings and Infrastructure: The segment generated revenues of $365.1 million (accounting for 39% of total revenues), which increased 13.6% on a year-over-year basis. Despite continued supply chain challenges, revenue growth in civil construction was strong in all regions served. Also, growth in recurring software bookings in the software business remained a tailwind.
Geospatial: This segment generated revenues of $222.1 million (24% of total revenues), which grew 14.8% from the prior-year quarter. The growth was driven by continued strong demand across all major regions and end markets, partially offset by supply chain challenges.
Resources and Utilities: This segment generated revenues of $183.8 million (20% of total revenues), which increased 18.4% from the prior-year quarter. The increase in revenues was attributed to healthy agricultural markets. Also, strong growth in positioning services remained a positive. Yet, the segment revenues were affected by supply chain constraints.
Transportation: The segment generated revenues of $155 million (accounting for 17% of total revenues), which declined 2.9% on a year-over-year basis. The segment was severely impacted by supply chain constraints. Nonetheless, subscription growth resulted in increasing enterprise revenues. This remained a positive for the segment.
Operating Details
For the fourth quarter, non-GAAP gross margin came in at 57.8%, contracting 160 basis points (bps) year over year.
As a percentage of revenues, adjusted EBITDA contracted 200 bps year over year to 24.1%.
On a non-GAAP basis, operating expenses accounted for 35.8% of revenues and expanded 10 bps from the year-ago quarter.
Consequently, non-GAAP operating margin came in at 22.1%, which contracted 160 bps year over year.
Balance Sheet & Cash Flow
At the end of fourth-quarter 2021, cash and cash equivalents were $325.7 million, down from $513.2 million at the end of third-quarter 2021.
Accounts receivables were reported at $624.8 million, which increased from $580.5 million in the third quarter.
Total debt was $1.29 billion at fourth quarter-end compared with $1.32 billion at third quarter-end.
The company generated $155.3 million of cash from operations compared with $166.4 million in the third quarter. It generated free cash flow of $140.6 million for the reported quarter.
Guidance
For full-year 2022, Trimble expects revenues between $3.95 billion and $4.05 billion. Also, the company anticipates non-GAAP earnings per share for 2022 in the range of $2.75-$2.95.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Trimble has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Trimble has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.