Trimble (TRMB) Q3 Earnings Beat Estimates, Revenues Down Y/Y
Zacks Investment Research | Oct 31, 2019 10:51PM ET
Trimble Inc. (NASDAQ:TRMB) reported third-quarter 2019 non-GAAP earnings of 48 cents per share, beating the Zacks Consensus Estimate by 1 cent. However, the figure declined 2% year over year and 17.8% sequentially.
Per management, non-GAAP revenues decreased 2.5% year over year and 8.3% on a sequential basis to $784.3 million. Moreover, the company’s GAAP revenues came in $783.9 million, down 1.4% from the prior-year quarter and 8.3% from the previous quarter.
This was primarily due to weakness in the market conditions. Moreover, sluggish performance of Resources and Utilities and Geospatial segments during the reported quarter.
Nevertheless, the company witnessed solid momentum across Buildings and Infrastructure and Transportation segments during the third quarter.
Product revenues (59% of GAAP revenues) totaled $458.8 million, down 8.2% on a year-over-year basis. Services revenues (21% of revenues) came in at $168 million, up 7.3% year over year. Subscription revenues (20% of revenues) improved 13% from the year-ago quarter to $157.1 million.
Management expects market uncertainties to continue acting as a headwind in the ongoing quarter.
Coming to price performance, shares of Trimble have gained 21.1% on a year-to-date basis, underperforming the Trimble Inc. Quote
Operating Details
In the third quarter, non-GAAP gross margin came in at 57%, contracting 90 bps year over year owing to unfavorable revenue mix.
Adjusted operating expenses accounted for 36.4% of non-GAAP revenues, contracting 70 bps compared with the year-ago quarter.
Further, non-GAAP operating margin came in at 20.7%, which contracted 10 bps year over year.
Balance Sheet
As of Sep 27, 2019, cash and cash equivalents were $184.6 million, down from $199.6 million as of Jun 28, 2019. Inventories were $290.1 million, up from $287.9 million in the previous quarter.
Long-term debt was $1.514 billion at the end of the third quarter, compared with $1.513 billion at the end of the second quarter.
Further, the company generated $137 million of cash from operations and $121 million of free cash flow during the reported quarter.
Additionally, the company repurchased shares worth $121 million in the third quarter.
Guidance
For fourth-quarter 2019, Trimble anticipates non-GAAP earnings between 46 cents and 50 cents per share. The Zacks Consensus Estimate for earnings is pegged at 50 cents.
The company expects GAAP revenues between $768 million and $798 million. Further, it anticipates non-GAAP revenues between $770 million and $798 million. The Zacks Consensus Estimate for revenues is projected at $818.93 million.
For 2019, management anticipates non-GAAP earnings between $1.91 and $1.95 per share. The Zacks Consensus Estimate for earnings is pegged at $1.95.
Get The News You Want
The company revised the guidance for non-GAAP revenues downward from $3.255 billion- $3.315 billion to $3.215 billion-$3.245 billion. Further, guided range for GAAP revenues moved south from $3.251 billion-$3.311 billion to $3.209 billion-$3.239 billion. The Zacks Consensus Estimate for revenues is projected at $3.28 billion.
Zacks Rank & Key Picks
Trimble currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are NetEase, Inc. (NASDAQ:NTES) , Itron, Inc. (NASDAQ:ITRI) and Five9, Inc. (NASDAQ:FIVN) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see Zacks Investment Research