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iRobot (IRBT) Tops Q2 Earnings & Revenues, Raises 2017 View

Premium consumer technology company, iRobot Corporation IRBT reported better-than-expected results for second-quarter 2017.

This Zacks Rank #3 (Hold) stock also raised its full-year 2017 guidance as it sees encouraging prospects for business in the U.S. as well as the Europe, Middle East and Africa (EMEA) in the near term.

Earnings and Revenues

Quarterly adjusted earnings came in at 27 cents per share, handily beating the Zacks Consensus Estimate of 25 cents. The bottom line also came in higher than the year-ago quarter tally of 17 cents per share.

Quarterly revenues came in at $183.1 million, comfortably surpassing the Zacks Consensus Estimate of $176 million. In addition, the top line came 23.2% higher than the prior-year quarter figure.

iRobot Corporation Price, Consensus and EPS Surprise

 

iRobot Corporation Price, Consensus and EPS Surprise | iRobot Corporation Quote

Costs and Margins

Cost of sales in the reported quarter was $93.3 million, up 18% year over year. Gross profit margin in the reported quarter came in at 49.1%, expanding 230 basis points (bps) year over year.

Total operating expenses were $85.8 million, up 34.5% year over year.

Operating margin came in at 2.2% compared with 3.9% recorded in the year-ago period.

Segmental Information

On Apr 4, 2016, iRobot successfully completed the divestiture of its Defense & Security business to solely focus on its Consumer business.

In second-quarter 2017, the company’s Consumer business generated revenues worth $183.1 million, up 23.7% year over year. This upswing was stemmed by robust sales of the company’s home robotic products across all (especially Roomba 652) major end markets.

Total units shipped in the quarter came in at 749,000, up from 674,000 shipped in second-quarter 2016.

Balance Sheet and Cash Flow

iRobot exited the quarter under review with cash and cash equivalents of $220.2 million, up from $214.5 million recorded in Dec 31, 2016. Long-term liabilities were $6.3 million, nearly flat with the figure recorded at the end of 2016.

At the end of the second quarter, iRobot generated net cash of $32.8 million from operating activities as against $35.6 million generated in the year-earlier period. Capital expenditure was $13.3 million on Jul 1, 2017, compared to $4.9 million recorded at the end of second-quarter 2016.

Outlook

iRobot raised its revenue guidance for full-year 2017 from $780–$790 million to $815–$825 million (estimating a year-over-year increment of 24–26%). Furthermore, the company lifted its full-year earnings guidance from $1.45–$1.70 per share to the $1.80–$2.00 per share range. However, the company noted that the revised guidance does not include the impact of its planned Robopolis acquisition, which is likely to close by fourth-quarter 2017. Notably, iRobot mentioned that it plans to fund several new product innovation projects with the incremental profitability.

Key Picks

A few better-ranked stocks in the industry are listed below:

Apogee Enterprises, Inc. APOG has an average positive earnings surprise of 3.42% for the last four quarters and currently boasts a Zacks Rank #1 (Strong Buy). You can see see the complete list of today’s Zacks #1 Rank stocks here.

Deere & Company DE sports a Zacks Rank #1 and has an average positive earnings surprise of 70.41% for the past four quarters.

AGCO Corporation AGCO, which also boasts a Zacks Rank #1 at present, generated an average positive earnings surprise of 40.39% over the trailing four quarters.

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