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Inseego (INSG) to Report Q1 Earnings: What's in the Cards?

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Inseego Corp. (INSG - Free Report) is set to report first-quarter 2020 results on May 6.

The Zacks Consensus Estimate for revenues is currently pegged at $52.4 million, which suggests an increase of 7.9% from the year-ago quarter reported figure.

For the quarter under review, the Zacks Consensus Estimate for loss has been steady at 9 cents per share in the past 30 days, wider than a loss of 3 cents per share reported in the prior-year quarter.

Notably, in the trailing four quarters, the company’s earnings missed the Zacks Consensus Estimate in three quarters and came in line with the same once. It has a trailing four-quarter negative earnings surprise of 64.5%, on average.

Let’s see how things have shaped up prior to this announcement.

Key Factors to Consider

Inseego’s first-quarter performance is expected to have benefited from increased traction of its 5G based solutions.
 
The company unveiled its full lineup of new second-generation 5G devices that leverage the new Qualcomm (QCOM - Free Report) Snapdragon X55 5G modem and previewed its new 5G portfolio of industrial IoT, fixed wireless access and mobile broadband product lines in the to-be-reported quarter. This is likely to have contributed to the top line.

Inseego Corp. Price and EPS Surprise

Inseego Corp. Price and EPS Surprise

Inseego Corp. price-eps-surprise | Inseego Corp. Quote

Additionally, first-quarter results are likely to reflect strong demand for Inseego’s strong portfolio of 4G solutions.

The company launched a 4G LTE fixed wireless access product, BPC100 for business phone connectivity for small/medium businesses (SMB) and enterprise users, providing complete connectivity for voice and data (including POS transactions and alarm monitoring). The BPC100 is available through Verizon’s (VZ - Free Report) Enterprise Sales.

Moreover, the company’s Skyus line of industrial IoT products has been gaining traction due to expansion in the software-defined wide area network (SD WAN) market. This enabled the company to partner with top SD WAN providers like VMWare , Riverbed and Cisco Meraki.

Furthermore, the company’s MiFi mobile hotspot devices that provide a robust portfolio of mobile hotspots, USB modems, routers and phone line hubs are likely to have gained owing to demand from workers and families practicing work from home amid coronavirus-led lockdown by offering access to secure and reliable connectivity.

However, the company anticipates promotional change at its largest customer — Verizon, and seasonality in business to weigh on first-quarter performance amid coronavirus lockdown.

Additionally, increased expenditure on research & development for the development of 5G is expected to have kept margins under pressure.

Key Q1 Developments

On Mar 10, Inseego, which currently has a Zacks Rank #3 (Hold), announced a $25-million investment from Mubadala Capital, an Abu Dhabi based sovereign investor. Mubadala joins existing major investors Tavistock Group and North Sound Partners. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

This investment is expected to provide the company with additional liquidity to continue capitalizing on the global opportunity that 5G presents.

Additionally, the company’s Skyus 300 LTE gateway started providing high-performance cellular connectivity for a new Emergency Call Box solution to combat coronavirus.

This turnkey call station combines the Skyus LTE gateway with the Code Blue Centry Help Point and the Solis Energy power system in one bundled solution that can be deployed easily to improve public safety in areas where landline connections don’t reach, like parking lots, college campuses, transit stations, airports and city parks.

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