Novatel Wireless Inc. (NVTL) posted mixed financial results for the first quarter of 2013. On a GAAP basis, net loss in the reported quarter was $9.1 million or 27 cents per share compared with the year-ago net loss of $37.9 million or a loss of $1.17 per share. However, quarterly adjusted loss per share of 25 cents was wider than the Zacks Consensus Estimate of a loss of 22 cents per share.
Total revenue in the reported quarter stood at $85.9 million, down 14.2% year over year but above the Zacks Consensus Estimate of $83 million. The year-over-year decline in revenues was mainly attributed to subdued performance in the Mobile Computing Product segment. Segment wise, Mobile Computing Products generated revenues of $75.6 million down 16.8% year over year. M2M Products and Solutions revenues were $10.3 million up 11.1% year over year.
Quarterly gross margin was 19.6% compared with 21% in the year-ago quarter. Operating expenses in the reported quarter were $26 million compared with $29.5 million in the year-ago quarter. Quarterly operating loss was $9.2 million compared with $58.8 million in the year-ago quarter.
During the first quarter of 2013, Novatel generated $1.9 million of cash from operations compared with a cash consumption of $18.2 million in the year-ago quarter. Free cash flow was a negative $1 million in the reported quarter compared with a negative $19.4 million in the prior-year quarter. At the end of the first quarter of 2013, Novatel had approximately $54 million in cash and marketable securities on its balance sheet compared with $55.3 million at the end of 2012. The balance sheet of Novatel remains debt free.
Management provided revenue guidance for the second quarter of 2013 in the range of $90–$98 million. Non-GAAP gross margin is expected to be between 21% and 22%. Non-GAAP earnings per share are anticipated in the band of a loss of 13 cents per share to 6 cents per share.
Other Stocks to Consider
Novatel Wireless currently has a Zacks Rank #3 (Hold). Other stocks to consider in the wireless connectivity solutions industry include Analogic Corp. (ALOG), Electronics for Imaging Inc. (EFII) and Synaptics Inc. (SYNA). All these stocks currently carry a Zacks Rank #1 (Strong Buy).
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