Tessco Technologies (TESS) Reports Q3 EPS of $0.32, Revenues Beat

Tessco Technologies (NASDAQ: TESS) reported Q3 EPS of $0.32, versus $0.19 reported last year. Revenue for the quarter came in at $152.3 million versus the consensus estimate of $150.92 million.

• Diluted earnings per share up 68% year over year to $0.32, the highest quarterly EPS in three years
• Revenue of $152.3 million, up 4% year over year
• Year over year revenue growth achieved for eighth time in past nine quarters
• Revenue up 7% for the first nine months of fiscal 2019 compared to the same period of fiscal 2018
• Revenue growth of 48% in the public carrier market compared with prior-year third quarter
• Overall expense management contributed to operating margin of 2.3%, compared with 1.5% in the third quarter of fiscal 2018
• Declared quarterly dividend of $0.20 per share

“We achieved $0.32 of earnings per share in the third quarter, a 68% increase year over year, which represents the highest quarterly EPS in three years,” said Murray Wright, President and Chief Executive Officer. “Overall revenue growth was 4% in the third quarter, representing the eighth quarterly year over year sales increase in the past nine quarters. This revenue growth was driven by a 48% increase in sales to the Public Carrier ecosystem as we continue to capitalize on opportunities in that market related to FirstNet and other carrier projects. We are seeing strong results from our larger customers, winning new project-driven business with major contractors, and increasing market share with existing customers. We are also well positioned to be a leader in providing products and solutions for the 5G build out over the next several years.

“The strength in Public Carrier sales was partially offset by lower year over year sales to our VAR and Integrator as well as Retail markets. We completed the restructure of our VAR and Integrator sales organization in the second quarter to a regional model, and it took longer than expected to work through those changes. We are confident that we will gain traction in this market in the coming quarters and that this new model positions us well to capitalize on exciting growth opportunities. Retail market sales were affected, in part, by a softer-than-expected major phone release.

“Expense management initiatives and a lower effective tax rate also contributed to the year over year increase in earnings per share to $0.32. We will continue our focus on rigorous operational execution as we manage the near-term challenges inherent with the strong growth we are experiencing from project-based and larger retail customers.

“As we enter the final quarter of fiscal 2019, our team is executing well on both sales and profitability initiatives. We expect to be profitable in the fourth quarter and to achieve annual increases on both the top and bottom lines year over year. While we still have work to do as we prepare to capitalize on the growth in our marketplace, we are confident in our future and excited about the prospects ahead,” concluded Wright.

For earnings history and earnings-related data on Tessco Technologies (TESS) click here.

You May Also Be Interested In

• Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
• Zeo Energy Corp (ZEO) Misses Q2 EPS by 7c
• Vivos Therapeutics posts 35% revenue gain but widens net loss