Trimble (TRMB) Q3 Earnings Beat Estimates, Revenues Up Y/Y
Trimble TRMB delivered third-quarter 2023 non-GAAP earnings of 68 cents per share, which surpassed the Zacks Consensus Estimate by 15.25% and increased 3% on a year-over-year basis.
Revenues of $957.3 million lagged the Zacks Consensus Estimate by 0.74% but increased 8.2% year over year.
Product revenues (accounting for 46.4% of total revenues) totaled $444 million, down 6% on a year-over-year basis. Subscription and services revenues (53.6% of total revenues) increased 24.5% year over year to $513.3 million.
The top-line growth was driven by solid momentum across the Buildings and Infrastructure, and Transportation segments. However, softness in the Resources and Utilities and Geospatial segments continued to be an overhang.
TRMB generated annualized recurring revenues of $1.94 billion in the reported quarter, which increased 25% on a year-over-year basis (up 13% on an organic basis).
Trimble returned 19% on a year-to-date basis, underperforming the Zacks Computer and Technology sector’s return of 30.3%.
Trimble Inc. Price, Consensus and EPS Surprise
Trimble Inc. price-consensus-eps-surprise-chart | Trimble Inc. Quote
Top-Line Details
Buildings and Infrastructure revenues (41.3% of total revenues) were $395.1 million, which fell 6% year over year.
Our model estimates for third-quarter Buildings and Infrastructure revenues were pegged at $401.2 million.
Geospatial revenues (18.9% of total revenues) of $180.7 million fell 1.9% year over year.
Our model estimates for third-quarter Geospatial revenues were pegged at $172.8 million.
Resources and Utilities revenues (19.3% of total revenues) of $184.9 million were down 3.5% year over year.
Our model estimates for third-quarter Resources and Utilities revenues were pegged at $184.6 million.
Transportation generated revenues (20.5% of total revenues) were $196.6 million, up 35.2% on a year-over-year basis.
Our model estimates for third-quarter Transportation revenues were pegged at $203.1 million.
Operating Details
In third-quarter 2023, the non-GAAP gross margin came in at 65%, expanding 410 basis points (bps) year over year.
On a non-GAAP basis, operating expenses accounted for 38.7% of revenues, up 160 bps year over year.
Non-GAAP operating margin came in at 26.2%, which expanded 250 bps year over year.
Balance Sheet
At the end of third-quarter 2023, cash and cash equivalents were $216.8 million, down from $273.3 million at the end of second-quarter 2023.
Total debt was $3.05 billion at the end of third-quarter end compared with $3.19 billion at second-quarter end.
Guidance
For fourth-quarter 2023, Trimble expects revenues between $890 million and $930 million. The Zacks Consensus Estimate is pegged at $999.06 million, indicating 16.64% year-over-year growth.
The company expects non-GAAP earnings between 55 cents and 63 cents per share. The consensus estimate is pegged at 69 cents, unchanged over the past 30 days.
For 2023, Trimble expects revenues between $3.757 billion and $3.797 billion. The Zacks Consensus Estimate is pegged at $3.87 billion, indicating 5.29% year-over-year growth.
Trimble now expects 2023 non-GAAP earnings between $2.58 and $2.66 per share. The Zacks Consensus Estimate for earnings is pegged at $2.64 per share, unchanged over the past 30 days.
Zacks Rank & Stocks to Consider
Trimble currently carries a Zacks Rank #3 (Hold).
NetEase NTES, Ballard Power Systems BLDP and Model N MODN are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NetEase shares have declined 33.8% year to date. NTES is set to report its third-quarter 2023 results on Nov 16.
Ballard Power shares have declined 1.8% year to date. BLDP is set to report its third-quarter 2023 results on Nov 7.
Model N shares have returned 12.2% year to date. MODN is set to report its fourth-quarter fiscal 2023 results on Nov 9.
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