iRobot filed the 1st quarter 10Q on Friday. A couple of comments:
1. The 2012 tax rate is now projected at 30%, well down from Leahy’s guidance of 35% given on the 2/8/12 conf call. All else being equal (big caveat), when applied to the last 3 quarters of 2012, this will result in ~$0.07 increase in full year EPS, using iRobot’s revenue guidance. Leahy did this last year as well, projecting on the 7/26/11 conf call a full year tax rate of 34%, and then on 8/5/11 in the 10Q a rate of 33%, only to end up with an actual rate of 25%.
2. Part of the loss in G&I (D&S) was attributed to scrap & rework costs (no indication which product); I have never seen reference to this before; hopefully it is a one-time thing. ~~~~~~~~~~~~~~~~~
Also, anybody notice in the conf call Colin’s reference to high speed UUV’s? In late March iRobot posted 2 job openings for lead research scientists with expertise in high speed UUV’s; the job postings were only up for 2-4 days before being taken down.
lamaZZi, Yes, I think that giving as guidance an overly high tax rate will allow for a bit of upside surprise (all else equal) when the actual tax rate ends up being lower.
I suppose that the justification is that "we don't know FOR SURE" that iRobot will get the domestic manufacturing deductions and/or R&D tax credits, and therefore guide high, even though the probability is that they will get these benefits.
With the reduction in guidance from 35% to 30%, iRobot has taken into account domestic manufacturing deductions, but has not yet taken into account R&D tax credits. I have no idea how much these might be, but if we end up with final rate of 25% (same as the last two years), that will boost full year EPS another $0.07 over the EPS with the 30% tax rate, for a combined full year increase in EPS of $0.14, just due to favorable tax rates. That's a nice boost when full year EPS guidance is $0.75-$0.95.