POLY Q1 Earnings Miss Estimates as Revenues Decrease Y/Y
Plantronics, Inc. POLY reported lackluster first-quarter fiscal 2023 results, missing both the bottom-line and top-line estimates owing to supply-chain woes. Despite global supply-chain headwinds, including semiconductor chip shortage and transportation constraints, Poly (the name under which Plantronics markets itself) remains focused on managing its profitability while investing in areas of accelerating growth.
Net Income
On a GAAP basis, net loss in the quarter was $33.1 million or a loss of 76 cents per share compared with a net loss of $36.8 million or 88 cents per share in the prior-year quarter. The improvement in the bottom line, despite top-line contraction, was primarily attributable to lower operating expenses and cost of sales.
Non-GAAP earnings in the reported quarter were $16.5 million or 37 cents per share compared with $26.5 million or 60 cents per share in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate by 16 cents.
Revenues
Quarterly GAAP revenues declined 3.6% year over year to $415.6 million as supply-chain constraints triggered by an acute chip shortage increased the backlog of products amid solid demand trends. Product revenues were down 1.9% to $364.2 million, while Services revenues decreased 14.3% to $51.4 million due to the shift from legacy goods to easy-to-install and less complex products with optional service contracts. The top line missed the consensus estimate of $419 million.
The demand environment remained strong as businesses prepared to return to office by modernizing their communications infrastructure. However, sales of each of the major product categories declined year over year across all regions.
Other Details
GAAP gross profit declined to $168 million from $175.2 million in the prior-year quarter on lower revenues, with respective margins of 40.4% and 40.6%. GAAP operating loss aggregated $15.1 million compared with $20 million a year ago. Adjusted EBITDA declined to $42.1 million from $61.5 million.
Cash Flow & Liquidity
During the quarter, Poly utilized $3 million cash for operating activities against a cash flow of $0.8 million in the prior-year period. As of Jul 2, 2022, the company had $142.4 million in cash and cash equivalents with $1,501.3 million in long-term debt.
Zacks Rank & Stocks to Consider
Poly currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TESSCO Technologies Incorporated TESS, carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 61.9%, on average, in the trailing four quarters. Earnings estimates for TESSCO for the current year have moved up 49.4% since August 2021.
TESSCO offers products to the industry’s top manufacturers in mobile communications, Wi-Fi, wireless backhaul and related products. With more than three decades of experience, it delivers complete end-to-end solutions to the wireless industry.
Spirent Communications plc SPMYY carries a Zacks Rank #2. Earnings estimates for the current year for the stock have moved up 10.8% since August 2021, while that for the next year is up 11.8%.
Founded in 1936 and headquartered in Crawley, the United Kingdom, Spirent offers a comprehensive, end-to-end solution that validates forwarding performance, latency and functional capabilities in an integrated approach that reduces the cost of ownership. It is a leading provider of Ethernet validation solutions in the market.
Harmonic Inc. HLIT, sporting a Zacks Rank #1, delivered an earnings surprise of 79.8%, on average, in the trailing four quarters. Earnings estimates for Harmonic for the current year have moved up 17.1% since February 2022.
Harmonic provides video delivery software, products, system solutions, and services worldwide. With more than three decades of experience, it has revolutionized cable access networking via the industry's first virtualized cable access solution, enabling cable operators to more flexibly deploy gigabit Internet service to consumers' homes and mobile devices.
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