iRobot (IRBT) Q3 Earnings and Revenues Miss Estimates

iRobot Corporation IRBT reported disappointing third-quarter 2022 results.

The company’s adjusted loss in the reported quarter was $2.08 per share, missing the Zacks Consensus Estimate of $1.16. The quarterly loss came against earnings of $1.59 per share recorded a year ago.

Revenue Details

iRobot generated revenues of $278.2 million in the reported quarter, lagging the Zacks Consensus Estimate of $450 million by 36.7%. On a year-over-year basis, revenues decreased 36.9% due to lower orders from retailers and distributors in North America and EMEA.

Sales derived from premium and mid-tier robots accounted for 76% of IRBT’s total robot revenues, lower than 86% in the year-ago quarter.

Sales generated from the e-commerce platform (representing 56% of the reported quarter’s revenues) decreased 41% year over year. The e-commerce platform includes online sources of retailers, IRBT’s app and website, as well as e-commerce websites. Direct sales to consumers were up 2% year over year to $41 million.

Total product units of 1,006 thousand shipped in the quarter reflected a year-over-year decrease of 34.8%, while average selling prices declined 2.5%. For vacuum products, revenues of $251 million reflected a decline of 36.9% from the year-ago quarter. Units shipped were 925 thousand, down 32.9% from the prior-year quarter. Revenues from mopping products decreased 37.2% to $27 million. Units shipped were 81 thousand, down from 164 thousand recorded in the year-ago quarter.

On a regional basis, iRobot sourced 52.9% of revenues from domestic operations and the rest came from the international arena. Domestic revenues totaled $147.1 million, reflecting a 32.1% decline from the year-ago quarter. International revenues declined 41.5% to $131.1 million.

Applied Industrial Technologies, Inc. Price and Consensus

Applied Industrial Technologies, Inc. price-consensus-chart | Applied Industrial Technologies, Inc. Quote

Margin Profile

In the quarter under review, iRobot’s cost of revenues decreased 27.4% to $201.8 million, representing 72.5% of revenues compared with 63.1% in the year-ago quarter. Adjusted gross profit was $78.3 million, down 52% year over year, while the adjusted gross margin decreased 880 basis points to 28.2%.

Research and development expenses were $41.4 million, up 2.7% year over year. This accounted for 14.9% of revenues compared with 9.1% in the year-ago quarter. Selling and marketing expenses increased 2% to $60.3 million. As a percentage of revenues, it was 21.7% for the reported quarter compared with 13.4% in the prior-year period. General and administrative expenses were $31.5 million, up 38.8% year over year. The figure mirrored 11.3% of the total revenue base compared with 5.2% in the year-earlier quarter.

In the third quarter, iRobot recorded an adjusted operating loss of $34.5 million against the operating income of $48 million in the year-ago period. The adjusted operating margin was (12.4%) versus 10.9% in the year-ago quarter.

Balance Sheet and Cash Flow

While exiting third-quarter 2022, iRobot had cash and cash equivalents of $89.6 million, decreasing 55.5% from $201.5 million recorded at the end of fourth-quarter 2021. Total long-term liabilities were $56.1 million, down 22.1% from the figure recorded at the end of fourth-quarter 2021.

In the first nine months of 2022, iRobot used net cash of $212.6 million for operating activities compared with net cash of $90.8 million used in the prior-year period. Capital used for purchasing property and equipment totaled $8.9 million, decreasing 64.8%.

Zacks Rank & Stocks to Consider

IRBT currently has a Zacks Rank #2 (Buy).

Some other top-ranked companies from the Industrial Products sector are discussed below:

Enerpac Tool Group Corp. EPAC delivered an average four-quarter earnings surprise of 3.4%. EPAC presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.

EPAC’s earnings estimates have increased 9.1% for fiscal 2023 (ending August 2023) in the past 60 days. The company’s shares have gained 32.5% in the past six months.

Applied Industrial Technologies, Inc. AIT presently has a Zacks Rank #1 and a trailing four-quarter earnings surprise of 24.8%, on average.

AIT’s earnings estimates have increased 3% for fiscal 2023 (ending June 2023) in the past 60 days. The company’s shares have risen 22.9% in the past six months.

IDEX Corporation IEX presently has a Zacks Rank of 2 (Buy). IEX’s earnings surprise in the last four quarters was 5.7%, on average.

In the past 60 days, IDEX’s earnings estimates have increased 1.8% for 2022. The stock has rallied 21.7% in the past six months.

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