Daktronics (DAKT) Misses Q3 EPS by 1c, Offers Outlook

February 19, 2013 7:42 AM EST
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Daktronics, Inc. (NASDAQ: DAKT) reported Q3 EPS of $0.06, $0.01 worse than the analyst estimate of $0.07. Revenue for the quarter came in at $111.1 million versus the consensus estimate of $123.83 million.


CEO Jim Morgan said, "Our backlog includes some work that is not deliverable in the fourth quarter of fiscal 2013 due to customers' schedules; however, we expect sales to increase in our fiscal 2013 fourth quarter over both the third quarter of fiscal 2013 and the fourth quarter of fiscal 2012. Gross profit margin is expected to be lower than our fiscal 2013 year-to-date levels due to the mix of business, as we anticipate working on a number of larger contracts with lower sales margins this quarter. Operating expenses are expected to be slightly less than in our fiscal third quarter. We are estimating that our capital investment for all of fiscal 2013 will be less than $11.0 million, down from $16.5 million in fiscal 2012."

"We continue to see a strong pipeline of potential business. We see opportunities in our International business unit in third party advertising. We recently announced the prospective acquisition of OPEN Out-of Home Solutions ("OPEN"), a Belgian company that specializes in serving the third party advertising market in Europe. We expect to complete the integration of OPEN into Daktronics by the first quarter of fiscal 2014, and we look forward to the opportunities this acquisition offers. We see opportunity for continued growth in video projects for high schools in Schools and Theatres, and large video systems in Live Events. Transportation has a strong pipeline and we will start shipping our new full color standard displays specially designed for that market in the fourth quarter. We see the shift to full color in the transportation business as a positive growth driver for that business. We expect a limited amount of growth in our commercial business, but opportunities exist for large video projects and replacement programs of some of our national on-premise accounts. We remain committed to our three-year strategic goal to significantly improve operating margin by attaining top line growth and containing costs. We have more work to do over the next couple of years to achieve and sustain that goal, and we will continue to work on improvements during the fourth quarter. We continue to work to improve the gross profit on contracts as well as on standard products through initiatives in product design, manufacturing, and project management," continued Morgan.

For earnings history and earnings-related data on Daktronics, Inc. (DAKT) click here.

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