Ituran Location & Control (ITRN) Misses Q2 EPS by 52c, Revenues Beat

Ituran Location & Control (NASDAQ: ITRN) reported Q2 EPS of ($0.30), $0.52 worse than the analyst estimate of $0.22. Revenue for the quarter came in at $53.3 million versus the consensus estimate of $49.61 million.

Highlights of the second quarter of 2020

• The results were impacted by the global Covid-19 pandemic;
• Revenue of $53.3 million;
• Adjusted EBITDA was $13.9 million, a decline of 9% on a sequential basis;
• Generated $19.3 million in quarterly operating cash flow;
• Total subscribers reached 1,751,000 at the end of the quarter

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, "We are happy with Ituran's second quarter results which were ahead of expectations, particularly given the unprecedented global macroeconomic situation with full shutdowns in the geographies that we operate in. We took early steps- reducing and matching expenses to the lower expected revenue level and placed focus on cash preservation. Our second quarter results demonstrate these efforts were successful. I would like to thank all Ituran's employees around the world for their exceptional execution despite tremendous difficulties. It is an honor to work with such a great team."

Continued Sheratzky, "The non-cash impairment in Road Track is an accounting effect mainly due to the sharp increase in the macro risk factors of the various countries in which Road Track operates and not related to Road Track's long-term performance or outlook specifically. The increase in country risk caused an increase in the weighted average cost of capital (WACC) calculation, which lowered the valuation of this business on our balance sheet."

"Excluding the non-cash impairment charges, Ituran remains profitable and continues to be cash generating. In fact, we had one of our strongest quarters of cash generation, with a positive operating cash flow of $19.3 million. Ituran's stability during this unprecedented global crisis, demonstrates the overall resilience of our business model," added Sheratzky.

Mr. Sheratzky concluded, "The global uncertainty caused by the ongoing Corona pandemic is expected to continue for the immediate future. We will remain proactive and continue to align our expenses to expected revenue levels. Looking ahead, we therefore expect similar levels of performance in our third quarter results. Longer-term, given the challenges that we have already overcome, I am confident that Ituran will emerge this period a stronger and more efficient company. I believe that once we can all put this pandemic behind us, we will have an improved platform for long-term sustainable and profitable growth."

For earnings history and earnings-related data on Ituran Location & Control (ITRN) click here.

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