U.S. Markets open in 3 hrs 38 mins

Novatel Wireless Suffers 1Q Loss

Zacks Equity Research

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.

Financial outlook

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).

Read the Full Research Report on NVTL

Read the Full Research Report on SYNA

Read the Full Research Report on ALOG

Read the Full Research Report on EFII

Zacks Investment Research



More From Zacks.com