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iRobot (IRBT) Beats on Q4 Earnings, Issues 2020 Guidance

Zacks

Premium consumer technology company iRobot Corporation IRBT reported strong fourth-quarter 2017 results.

Earnings/Revenues

Adjusted earnings during the quarter came in at 54 cents per share, beating the Zacks Consensus Estimate of 26 cents. The bottom line also surpassed the year-ago tally of 49 cents per share.

Adjusted earnings for 2017 came in at $1.77 per share, missing the Zacks Consensus Estimate of $1.87. However, the figure came in higher than the year-ago tally of $1.51 per share.


Revenues

Quarterly revenues came in at $326.9 million, outpacing the Zacks Consensus Estimate of $317 million. The top line also came in 53.8% higher than the year-earlier tally. The upside stemmed from robust sales secured from the United States and Europe, the Middle East and Africa (EMEA).

The company generated $883.9 million revenues in 2017, higher than $660.6 million recorded in the year-ago period. The top line also surpassed the Zacks Consensus Estimate of $874.3 million.

iRobot Corporation Price, Consensus and EPS Surprise

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

Costs/Margins

Cost of sales in the reported quarter came in at $173.4 million, up 63.8% year over year. Gross profit margin in the quarter came in at 47%, contracting 320 basis points (bps) year over year.

Total operating expenses were $130.5 million, up 48.4% year over year. Operating margin came in at 7.1%, decreasing 170 basis points year over year.

Gross profit margin for 2017 was 49%, up 70 basis points year over year. Operating margin for 2017 was 8.2%, descending 50 bps year over year.

Balance Sheet/Cash Flow

Exiting the fourth quarter, this Zacks Rank #1 (Strong Buy) company had cash and cash equivalents of $128.6 million, up from $214.5 million recorded on Dec 31, 2016. Long-term liabilities were $23.5 million, significantly up from $6.3 million recorded at the end of 2016.

At the end of 2017, iRobot generated net cash of $76.3 million from operating activities as against $116.4 million generated in the year-earlier period. Capital expenditure was $23.4 million on Dec 30, 2017, compared to $10.8 million recorded at the end of fourth-quarter 2016.

Outlook

iRobot believes improving global economic conditions and upbeat consumer sentiments will drive demand for its premium home-robotic products in the quarters ahead. In addition, the company’s marketing programs and the Robopolis buyout (October 2017) will assist in boosting its top- and bottom-line growth trajectory.

Based on the existing market conditions, iRobot anticipates to generate revenues in the range of $1.05-$1.08 billion and earnings in the band of $2.10-$2.35 per share in 2018.

By 2020, iRobot intends to secure revenue growth of roughly 20%, gross margin growth of 50-51% and operating margin growth of nearly 10%.

Other Stocks to Consider

Some other top-ranked stocks in the Zacks Categorized Industrial Products Sector are listed below:

Applied Industrial Technologies, Inc. AIT sports a Zacks Rank #1. The company has pulled of a positive average earnings surprise of 10.97% in the last four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alarm.com Holdings, Inc. ALRM flaunts a Zacks Rank #1. The company pulled of a positive average earnings surprise of 65.40% over the trailing four quarters.

Smith (A.O.) Corporation AOS carries a Zacks Rank #2 (Buy). The company has pulled of a positive average earnings surprise of 3.85% during the same time frame.

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