Universal Electronics (NASDAQ: UEIC) reported Q2 EPS of $0.89, $0.04 better than the analyst estimate of $0.85. Revenue for the quarter came in at $153.1 million versus the consensus estimate of $153.45 million.

Financial Results for the Three Months Ended June 30: 2020 Compared to 2019

• GAAP net sales were $153.1 million, compared to $193.9 million; Adjusted Non-GAAP net sales were $153.3 million, compared to $193.4 million.
• GAAP gross margins were 24.9%, compared to 17.5%; Adjusted Non-GAAP gross margins were 28.5%, compared to 25.2%.
• GAAP operating income was $6.5 million, compared to an operating loss of $3.9 million; Adjusted Non-GAAP operating income was $14.5 million, compared to $15.8 million.
• GAAP net income was $14.4 million, or $1.02 per diluted share, compared to a net loss of $5.1 million or $0.37 per share; Adjusted Non-GAAP net income was $12.6 million, or $0.89 per diluted share, compared to $11.7 million, or $0.83 per diluted share.
• At June 30, 2020, cash and cash equivalents were $58.8 million.

“Over the past three decades, our innovation and product development have made UEI into a market leader with a strong financial foundation,” said Paul Arling, UEI’s chairman and CEO. “However, as expected in the current environment, customers have been cautious with their near-term orders, primarily with our traditional home entertainment and security customers. Due to the pandemic, the ability or willingness to install hardware in consumers’ homes, whether it is to establish new service or to upgrade premise equipment, has been significantly disrupted. Regardless, our long-term growth opportunities remain unchanged. Overall, consumption of video entertainment is sky rocketing, and consumers want simplified access to content. Our customers understand these market demands, and they are actively working on the development of a single platform to manage and deliver content from both traditional linear TV and streaming apps on one all-encompassing voice-enabled platform. UEI is partnering with multiple providers in developing this type of next-generation platform, which we expect will be announced and begin shipping in the next few quarters.

“Further, UEI’s Nevo Butler®, a smart home hub with a built-in voice assistant, unifies entertainment and home automation with a secure and managed hardware platform, enabling the limitless control options in the smart home. We offer a complete white label platform solution as well as software ingredients that can be integrated in other products to enable similar capabilities. The market is recognizing our technology lead, and we have secured our first customer for Nevo Butler, a leading telecommunications service provider, as well as several other active engagements in the professional security and hospitality markets.”

GUIDANCE:

Universal Electronics sees Q3 2020 EPS of $0.87-$0.97, versus the consensus of $0.97. Universal Electronics sees Q3 2020 revenue of $150-160 million, versus the consensus of $175.08 million.

For the third quarter of 2020, the company expects GAAP net sales to range between $150 million and $160 million, compared to $200.7 million in the third quarter of 2019. GAAP earnings per diluted share for the third quarter of 2020 are expected to range from $0.53 to $0.63, compared to a GAAP earnings per diluted share of $0.19 in the third quarter of 2019.

For the third quarter of 2020, the company expects Adjusted Non-GAAP net sales to range between $150 million and $160 million, compared to $200.9 million in the third quarter of 2019. Adjusted Non-GAAP earnings per diluted share are expected to range from $0.87 to $0.97, compared to Adjusted Non-GAAP earnings per diluted share of $1.01 in the third quarter of 2019. The third quarter 2020 Adjusted Non-GAAP earnings per diluted share estimate excludes $0.34 per share related to, among other things, excess manufacturing overhead costs, stock-based compensation, amortization of acquired intangibles, changes in contingent consideration relating to acquisitions, foreign currency gains and losses and the related tax impact of these adjustments.

For earnings history and earnings-related data on Universal Electronics (UEIC) click here.