We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
iRobot Corporation (IRBT - Free Report) kept its earnings beat streak alive in the third quarter of 2019. Its earnings surpassed estimates by a whopping 128.78% while sales beat the same by 11.71%.
The company reported earnings of $1.24 per share in the quarter, surpassing the Zacks Consensus Estimate of 54 cents. Earnings, adjusted for one-time items, were $1.50 per share, representing growth of 11.9% from the year-ago figure of $1.34. The results benefitted from healthy demand for products and rise in other income, partially offset by weak margins.
Revenues Rise on Solid Demand
In the quarter under review, the company’s net sales were $289.4 million, improving 9.4% from the year-ago quarter figure. Results benefitted from huge shipment to a U.S. retailer and solid international business. Also, the company’s revenues surpassed the Zacks Consensus Estimate of $259.1 million.
Total product units shipped in the quarter increased 4% year over year while average selling prices grew 10.5%. As noted, its revenues from vacuum products grew 6.2% year over year to $257 million. Units shipped were 975 thousand, up from 942 thousand in the year-ago quarter. Further, revenues from mopping products rose 39.1% to $32 million. Units shipped were 156 thousand, up from 145 thousand in the third quarter of 2018.
On a geographical basis, the company sourced roughly 40.8% of revenues from domestic operations, the rest came from the international arena. Domestic sales totaled $117.9 million, suggesting a 7.3% decline from the year-ago quarter. International sales grew 24.9% to $171.5 million. International operations benefited from healthy product demand in Japan and EMEA.
Margins Fall Y/Y
In the quarter under review, iRobot’s adjusted costs of revenues rose 19.9% year over year to approximately $149.1 million. It represented 51.5% of net revenues compared with 47% in the year-ago quarter. Adjusted gross profit in the quarter increased 0.1% year over year to $140.3 million while adjusted gross margin declined 450 basis points (bps) to 48.5%. The margin suffered from tariffs as well as promotional and pricing activities.
Research and development expenses were $33.4 million, down 5.4% year over year. It represented 11.5% of net sales versus 13.4% in the year-ago quarter. Selling and marketing expenses of $42.3 million reflected a year-over-year increase of 8.3%. As a percentage of net sales, it represented 14.6% versus 14.8% in the year-ago quarter. General and administrative expenses were $18.4 million, down 21.2% year over year. It represented 6.4% of net sales versus 8.8% in the year-ago quarter.
Adjusted operating income in the quarter under review rose 2.4% year over year to $50.1 million. Adjusted operating margin declined 120 bps to 17.3% in the reported quarter.
Balance Sheet and Cash Flow
Exiting the third quarter, iRobot had cash and cash equivalents of $70.5 million, down roughly 46.9% from $132.8 million recorded at the end of the last reported quarter. Total long-term liabilities were $67 million, down from $68.9 million in the previous quarter.
In the first three quarters of 2019, the company used net cash of $31.6 million for operating activities against net cash of $40.3 million generated in the year-ago comparable period. Capital used for purchasing property and equipment totaled $27.1 million versus $25.3 million in the year-ago period.
Outlook
In the quarters ahead, iRobot anticipates gaining from diversified product portfolio, innovation investments and growing global presence. Also, it believes that efforts to diversify manufacturing capabilities will be boon. It is worth noting here that the company successfully launched Braava jet m6 mop and Roomba s9 vacuum in Europe while launched Roomba s9 vacuum in Japan in the third quarter of 2019.
However, iRobot is wary about the ongoing trade tiff between the United States and China, and the possible impact of higher tariff rates on robotic products on its results.
For 2019, the company revised down revenue projection to $1.2-$1.21 billion from previously mentioned $1.2-$1.25 billion. The new projection suggests growth of 10-11% (versus the previously mentioned 10-14%) from the previous year’s reported figure.
Gross margin in the year will likely be 45%, at the low-end of previously mentioned 45-46%. Operating income is predicted to be $75-$80 million, down from $75-$100 million mentioned earlier. Earnings projection has been declined from $2.40-$3.15 to $2.60-$2.80.
For the fourth quarter of 2019, the company predicts revenues of $413-$423 million, suggesting year-over-year growth of 10%. Sales in the United States and international arena are expected to grow in high-single digits.
Also, gross margin for the fourth quarter will likely be roughly 40%. The company believes that margin will suffer from tariff costs, promotional activities and reduced prices of products. Earnings will likely be 33-53 cents per share.
iRobot Corporation Price, Consensus and EPS Surprise
In the past 60 days, earnings estimates for these companies have improved for the current year. Further, average earnings surprise for the last four quarters was 6.26% for Cintas, 9.68% for Brady and 8.72% for Tetra Tech.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
iRobot (IRBT) Beats Q3 Earnings Estimates, Lowers View
iRobot Corporation (IRBT - Free Report) kept its earnings beat streak alive in the third quarter of 2019. Its earnings surpassed estimates by a whopping 128.78% while sales beat the same by 11.71%.
The company reported earnings of $1.24 per share in the quarter, surpassing the Zacks Consensus Estimate of 54 cents. Earnings, adjusted for one-time items, were $1.50 per share, representing growth of 11.9% from the year-ago figure of $1.34. The results benefitted from healthy demand for products and rise in other income, partially offset by weak margins.
Revenues Rise on Solid Demand
In the quarter under review, the company’s net sales were $289.4 million, improving 9.4% from the year-ago quarter figure. Results benefitted from huge shipment to a U.S. retailer and solid international business. Also, the company’s revenues surpassed the Zacks Consensus Estimate of $259.1 million.
Total product units shipped in the quarter increased 4% year over year while average selling prices grew 10.5%. As noted, its revenues from vacuum products grew 6.2% year over year to $257 million. Units shipped were 975 thousand, up from 942 thousand in the year-ago quarter. Further, revenues from mopping products rose 39.1% to $32 million. Units shipped were 156 thousand, up from 145 thousand in the third quarter of 2018.
On a geographical basis, the company sourced roughly 40.8% of revenues from domestic operations, the rest came from the international arena. Domestic sales totaled $117.9 million, suggesting a 7.3% decline from the year-ago quarter. International sales grew 24.9% to $171.5 million. International operations benefited from healthy product demand in Japan and EMEA.
Margins Fall Y/Y
In the quarter under review, iRobot’s adjusted costs of revenues rose 19.9% year over year to approximately $149.1 million. It represented 51.5% of net revenues compared with 47% in the year-ago quarter. Adjusted gross profit in the quarter increased 0.1% year over year to $140.3 million while adjusted gross margin declined 450 basis points (bps) to 48.5%. The margin suffered from tariffs as well as promotional and pricing activities.
Research and development expenses were $33.4 million, down 5.4% year over year. It represented 11.5% of net sales versus 13.4% in the year-ago quarter. Selling and marketing expenses of $42.3 million reflected a year-over-year increase of 8.3%. As a percentage of net sales, it represented 14.6% versus 14.8% in the year-ago quarter. General and administrative expenses were $18.4 million, down 21.2% year over year. It represented 6.4% of net sales versus 8.8% in the year-ago quarter.
Adjusted operating income in the quarter under review rose 2.4% year over year to $50.1 million. Adjusted operating margin declined 120 bps to 17.3% in the reported quarter.
Balance Sheet and Cash Flow
Exiting the third quarter, iRobot had cash and cash equivalents of $70.5 million, down roughly 46.9% from $132.8 million recorded at the end of the last reported quarter. Total long-term liabilities were $67 million, down from $68.9 million in the previous quarter.
In the first three quarters of 2019, the company used net cash of $31.6 million for operating activities against net cash of $40.3 million generated in the year-ago comparable period. Capital used for purchasing property and equipment totaled $27.1 million versus $25.3 million in the year-ago period.
Outlook
In the quarters ahead, iRobot anticipates gaining from diversified product portfolio, innovation investments and growing global presence. Also, it believes that efforts to diversify manufacturing capabilities will be boon. It is worth noting here that the company successfully launched Braava jet m6 mop and Roomba s9 vacuum in Europe while launched Roomba s9 vacuum in Japan in the third quarter of 2019.
However, iRobot is wary about the ongoing trade tiff between the United States and China, and the possible impact of higher tariff rates on robotic products on its results.
For 2019, the company revised down revenue projection to $1.2-$1.21 billion from previously mentioned $1.2-$1.25 billion. The new projection suggests growth of 10-11% (versus the previously mentioned 10-14%) from the previous year’s reported figure.
Gross margin in the year will likely be 45%, at the low-end of previously mentioned 45-46%. Operating income is predicted to be $75-$80 million, down from $75-$100 million mentioned earlier. Earnings projection has been declined from $2.40-$3.15 to $2.60-$2.80.
For the fourth quarter of 2019, the company predicts revenues of $413-$423 million, suggesting year-over-year growth of 10%. Sales in the United States and international arena are expected to grow in high-single digits.
Also, gross margin for the fourth quarter will likely be roughly 40%. The company believes that margin will suffer from tariff costs, promotional activities and reduced prices of products. Earnings will likely be 33-53 cents per share.
iRobot Corporation Price, Consensus and EPS Surprise
iRobot Corporation price-consensus-eps-surprise-chart | iRobot Corporation Quote
Zacks Rank & Stocks to Consider
With a market capitalization of approximately $1.6 billion, the company currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Zacks Industrial Products sector are Cintas Corporation (CTAS - Free Report) , Brady Corporation (BRC - Free Report) and Tetra Tech, Inc (TTEK - Free Report) . All these stocks currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, earnings estimates for these companies have improved for the current year. Further, average earnings surprise for the last four quarters was 6.26% for Cintas, 9.68% for Brady and 8.72% for Tetra Tech.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>