Ituran Location & Control (ITRN) Misses Q1 EPS by 3c, Revenues Beat

Ituran Location & Control (NASDAQ: ITRN) reported Q1 EPS of $0.31, $0.03 worse than the analyst estimate of $0.34. Revenue for the quarter came in at $68.4 million versus the consensus estimate of $64.1 million.

Highlights of the first quarter of 2020

• Revenue of $68.4 million;
• EBITDA of $15.3 million;
• Generated $10.7 million in quarterly operating cash flow;
• Net increase in aftermarket subscribers of 17,000;
• Total subscribers reached 1,794,000 at the end of the quarter;

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, "We are pleased with Ituran's first quarter performance with revenues and operating income ahead of those of the prior quarter, driven by continued subscriber growth in the aftermarket business. This is despite the impact from the COVID-19 pandemic and some currency headwinds."

Continued Mr. Sheratzky, "Due to the pandemic, in the second quarter we have seen a halt in new car sales globally, and therefore in new subscribers. We have been focusing on reducing expenses across the board, which will allow us to mitigate some of the impact to profitability and cash generation. Consequently, for the second quarter, we expect between a 10-20% reduction in EBITDA.

"Conservatively, the board has decided to suspend our dividend payments for the time being in order to strengthen our cash levels, which will better enable us to weather this significant global crisis, while also providing us with increased capital to take advantage of any opportunities.

Concluded Mr. Sheratzky, "Our ability to remain profitable and cash flow positive during this unprecedented global crisis, demonstrates the overall resilience of our business model, built on the subscription fees of 1.8 million customers distributed globally. I remain optimistic over the long-term, while in the short-term preparing Ituran to overcome the current crisis. I am confident that Ituran will emerge this period as a stronger and more efficient company. "

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

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