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iRobot (IRBT) to Report Q1 Earnings: What's in the Cards?

Zacks Equity Research

iRobot Corporation IRBT is scheduled to release first-quarter 2019 results on Apr 23, after the market closes.

This industrial robot maker delivered better-than-expected results in the last four quarters, the average being a positive 92.23%. Notably, in the last reported quarter, the company’s earnings of 84 cents per share surpassed the Zacks Consensus Estimate of 51 cents by 64.71%.

In the past three months, shares of iRobot have increased 44.2% compared with the industry’s growth of 16.5%.

Let us see how things are shaping up for iRobot this quarter.

Factors to Affect Q1 Results

The robotic-technology specialist, iRobot’s solid product offerings and the zeal to innovate products place it better than other players in the industry. It is enjoying wide acceptances for the Roomba products, especially i7, i7+ and e5 robots, in domestic and international markets.

In addition, diversification of product portfolio through innovation will be a boon. The company’s launch of Terra, a robotic lawnmower, in January 2019 is anticipated to reinvent the lawn-cutting process. This robotic lawnmower is equipped with wire-free beacon system, Imprint Smart Mapping technology and iRobot HOME app. Also, effective marketing efforts for its Braava products — like the launch of a television program — strengthened business in Japan.

This apart, iRobot gains from efforts to improve operational efficiency and lower corporate tax rates.

The company does not provide quarterly projections but a look at its annual estimates will give us a fair idea about the to-be-reported quarter. Revenues in 2019 are anticipated to be $1.28-$1.31 billion, reflecting year-over-year growth of 17-20% and earnings are predicted to be $3.00-$3.25 per share versus $3.01 recorded in 2018.

However, costs related to products launches, expansion of manufacturing capabilities, and investment in innovation and product development are likely to take a toll on margins in 2019. Also, the company is likely to suffer from tensed trade relations between the United States and China as the former chose to impose tariffs on the import of wide categories of products. Gross margin for the year is predicted to decline roughly three percentage points to 48% while operating margin is likely to be 8-9% versus 10% in 2018.

Earnings Whispers

Our proven model provides some idea about the stocks that are about to release their earnings results. Per the model, a stock needs a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The case with iRobot has been provided below.

Earnings ESP: iRobot has an Earnings ESP of 0.00% as both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at 68 cents.

iRobot Corporation Price, Consensus and EPS Surprise

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

Zacks Rank: The company currently carries a Zacks Rank #3.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Stocks to Consider

Here are some companies in the Zacks Industrial Products sector that you may want to consider as they have the right combination of elements to post an earnings beat this quarter, according to our model.

Chart Industries, Inc. GTLS has an Earnings ESP of +8.66% and a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

HD Supply Holdings, Inc. HDS currently has an Earnings ESP of +0.81% and a Zacks Rank #3.

Colfax Corporation CFX presently has an Earnings ESP of +0.91% and a Zacks Rank #3.

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iRobot Corporation (IRBT) : Free Stock Analysis Report
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