Why Is Trimble (TRMB) Up 13.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Trimble Navigation (TRMB). Shares have added about 13.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Trimble due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Trimble Q4 Earnings Beat Estimates, Revenues Up Y/Y
Trimble delivered fourth-quarter 2023 non-GAAP earnings of 63 cents per share, which surpassed the Zacks Consensus Estimate by 8.62% and increased 5% on a year-over-year basis.
Revenues of $932.4 million beat the Zacks Consensus Estimate by 2.59% and increased 9% year over year.
Product revenues (accounted for 43.2% of total revenues) totaled $402.8 million, down 3.1% on a year-over-year basis. Subscription and services revenues (53.6% of total revenues) increased 20.2% year over year to $529.6 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 $1.98 billion, which increased 24% on a year-over-year basis (up 13% on an organic basis).
Top-Line Details
Buildings and Infrastructure revenues (41.7% of total revenues) were $388.5 million, which increased 11% year over year. The figure beat the Zacks Consensus Estimate by 2.62%.
Geospatial revenues (18.2% of total revenues) of $169.5 million fell 1% year over year. The figure beat the Zacks Consensus Estimate by 2.31%.
Resources and Utilities revenues (19.3% of total revenues) of $179.6 million declined 3% year over year. The figure lagged the Zacks Consensus Estimate by 1.98%.
Transportation generated revenues (20.9% of total revenues) of $194.8 million, up 30% on a year-over-year basis. The figure lagged the Zacks Consensus Estimate by 2.35%.
Operating Details
In fourth-quarter 2023, the non-GAAP gross margin came in at 65.3%, expanding 360 basis points (bps) year over year.
On a non-GAAP basis, operating expenses accounted for 41% of revenues, up 120 bps year over year.
Non-GAAP operating margin came in at 24.3%, which expanded 240 bps year over year.
Balance Sheet
At the end of the fourth quarter of 2023, cash and cash equivalents were $229.8 million, up from $216.8 million at the end of third-quarter 2023.
Total debt was $3.07 billion at the end of the fourth quarter compared with $3.05 billion at the third-quarter end.
Guidance
For first-quarter 2024, Trimble expects revenues between $905 million and $935 million. The company expects non-GAAP earnings between 57 cents and 62 cents per share.
For 2024, Trimble expects revenues between $3.57 billion and $3.67 billion. It expects 2024 non-GAAP earnings between $2.60 and $2.80 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -13.68% due to these changes.
VGM Scores
Currently, Trimble has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Trimble has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Trimble belongs to the Zacks Electronics - Miscellaneous Products industry. Another stock from the same industry, Carrier Global (CARR), has gained 7.3% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Carrier Global reported revenues of $5.1 billion in the last reported quarter, representing a year-over-year change of -0.1%. EPS of $0.53 for the same period compares with $0.40 a year ago.
Carrier Global is expected to post earnings of $0.50 per share for the current quarter, representing a year-over-year change of -3.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.1%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Carrier Global. Also, the stock has a VGM Score of C.
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