UPDATE: Sierra Wireless (SWIR) Tops Q2 EPS by 3c, Q3 Guidance Misses

(Updated - August 6, 2015 4:37 PM EDT)

Sierra Wireless (NASDAQ: SWIR) reported Q2 EPS of $0.26, $0.03 better than the analyst estimate of $0.23. Revenue for the quarter came in at $158 million versus the consensus estimate of $155.18 million.

GAAP RESULTS

• Gross margin was $50.9 million, or 32.3% of revenue, in the second quarter of 2015, compared to $43.3 million, or 32.1% of revenue, in the second quarter of 2014.
• Operating expenses were $46.8 million and earnings from operations were $4.1 million in the second quarter of 2015, compared to operating expenses of $49.6 million and a loss from operations of $6.3 million in the second quarter of 2014.
• Net earnings were $4.1 million, or $0.12 per diluted share, in the second quarter of 2015, compared to a net loss of $8.2 million, or $0.26 per diluted share, in the second quarter of 2014.

NON-GAAP RESULTS

• Gross margin was 32.4% in the second quarter of 2015, compared to 32.2% in the second quarter of 2014.
• Operating expenses were $40.4 million and earnings from operations were $10.7 million in the second quarter of 2015, compared to operating expenses of $39.8 million and earnings from operations of $3.7 million in the second quarter of 2014.
• Net earnings were $8.6 million, or $0.26 per diluted share, in the second quarter of 2015, compared to net earnings of $2.6 million, or $0.08 per diluted share, in the second quarter of 2014. The non-GAAP tax rate in the second quarter of 2015 was 19.6%.
• Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") were $13.1 million in the second quarter of 2015, compared to $6.8 million in the second quarter of 2014.

Financial Guidance

In the third quarter of 2015, we expect revenue and gross margin percentage to be similar to the second quarter of 2015 and operating expenses to increase slightly compared to the second quarter of 2015. This guidance does not include any contribution from the announced acquisition of MobiquiThings. This results in the following non-GAAP guidance for the third quarter of 2015:

Q3 2015 Guidance		Consolidated Non-GAAP
Revenue		$157.0 to $160.0 million
Earnings from operations		$9.5 to $11.0 million
Net earnings		$7.5 to $9.0 million
Earnings per share		$0.23 to $0.27 per share

This non-GAAP guidance for the third quarter of 2015 reflects current business indicators and expectations. Inherent in this guidance are risk factors that are described in greater detail in our regulatory filings. Our actual results could differ materially from those presented above. All figures are approximations based on management's current beliefs and assumptions.

(Street sees Q3 EPS of $0.30 on revenue of $163.6 million)

For earnings history and earnings-related data on Sierra Wireless (SWIR) click here.

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