Yahoo Finance Why Is Trimble (TRMB) Down 13.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Trimble Navigation (TRMB). Shares have lost about 13.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Trimble due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Trimble Q4 Earnings Miss Estimates
Trimble reported fourth-quarter 2022 non-GAAP earnings of 60 cents per share, which missed the Zacks Consensus Estimate by 1.6%. Further, the bottom line decreased 3.2% from the year-ago quarter’s figure.
TRMB’s revenues of $856.5 million missed the Zacks Consensus Estimate by 1.8%. Also, the figure was down 7.5% year over year.
The top-line decrease was attributed to weak momentum across Building and Infrastructure, Geospatial, and Transportation segments.
Softening demand in Europe, macroeconomic headwinds, and supply-chain constraints remained overhangs.
TRMB generated annualized recurring revenues of $1.60 billion in the reported quarter, which increased 14% on a year-over-year basis.
Top Line in Detail
Product revenues (accounting for 54% of total revenues) totalled $462 million, down 17.8% on a year-over-year basis. Subscription revenues (27%) increased 15.9% from the year-ago quarter’s level to $230.6 million. Services revenues (19%) of $163.9 million dipped 0.7% from the year-ago quarter’s reported figure.
Trimble operates under the following four organized segments:
Buildings and Infrastructure: The segment generated revenues of $350.2 million (accounting for 41% of total revenues), which decreased 4.1% on a year-over-year basis.
Geospatial: This segment generated revenues of $171.1 million (20% of total revenues), which fell 23% from the prior-year quarter’s level. The segment was affected by reduced end-market demand and supply-chain constraints.
Resources and Utilities: This segment generated revenues of $185.2 million (22% of total revenues), up 0.8% from the prior-year quarter’s level. Higher revenues were attributed to strong growth in positioning services, utilities and forestry businesses remained positive.
Transportation: The segment generated revenues of $150 million (accounting for 17% of total revenues), which dropped 3.2% on a year-over-year basis.
Operating Details
For the fourth quarter, the non-GAAP gross margin came in at 61.8%, expanding 400 basis points (bps) year over year.
On a non-GAAP basis, operating expenses accounted for 39.8% of revenues and expanded 400 bps from the year-ago quarter’s figure.
Non-GAAP operating margin came in at 21.9%, which contracted 20 bps year over year.
Balance Sheet
At the end of fourth-quarter 2022, cash and cash equivalents were $271 million, down from $308.7 million at the end of third-quarter 2022.
Accounts receivables were $643.3 million in the reported quarter, increasing from $566.1 million in the prior quarter.
Total debt was $1.52 billion at the fourth-quarter end compared with $1.59 billion at the third-quarter end.
Guidance
For 2023, Trimble expects revenues between $3.7 billion and $3.8 billion.
Trimble 2023 non-GAAP earnings per share are anticipated within $2.66-$2.86.
Management expects its non-GAAP tax rate to be 18% for 2023.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -13.12% due to these changes.
VGM Scores
At this time, Trimble has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 is part of the Zacks Electronics - Miscellaneous Products industry. Over the past month, Carrier Global (CARR), a stock from the same industry, has gained 2.7%. The company reported its results for the quarter ended December 2022 more than a month ago.
Carrier Global reported revenues of $5.11 billion in the last reported quarter, representing a year-over-year change of -0.6%. EPS of $0.40 for the same period compares with $0.44 a year ago.
For the current quarter, Carrier Global is expected to post earnings of $0.49 per share, indicating a change of -9.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -5.9% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Carrier Global. Also, the stock has a VGM Score of B.
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