Resideo Technologies, Inc. (REZI) Misses Q3 EPS by 13c, Revenues In-Line; Provides FY19 EBITDA Guidance

Resideo Technologies, Inc. (NYSE: REZI) reported Q3 EPS of $0.19, $0.13 worse than the analyst estimate of $0.32. Revenue for the quarter came in at $1.23 billion versus the consensus estimate of $1.23 billion.

"I am disappointed in our results for the third quarter. While ADI continued its strong performance, results in our Products & Solutions segment were adversely impacted by volume declines, product and channel mix, inventory write-downs, and high product rebates from a pre-spin contract," said Mike Nefkens, president and CEO of Resideo. "We remain confident in the fundamentals of our business. We are taking the following actions to improve business performance:

• working with our channel partners to improve the positioning of the T-Series line of non-connected thermostats;
• rebuilding value engineering and sourcing capabilities to drive increased gross margins; and
• conducting a comprehensive operational and financial review of the company to simplify operations, increase gross margins, reduce cost structure, and drive sales growth."

Full-Year Guidance

The company expects the third-quarter headwinds to continue into the peak winter demand period, which is expected to reduce previously anticipated full-year 2019 Products & Solutions segment revenue by approximately $110 million. Approximately $66 million of this expected shortfall is from Comfort, $22 million is from RTS, and $22 million is from Security.

Full-year adjusted EBITDA guidance was reduced due to the lower revenues, higher-than-anticipated contractual customer rebates, inventory write-downs, and continued mix headwinds.

As noted in its October preliminary release, Resideo updated its full-year 2019 guidance for GAAP revenue growth of 2% to 4%, as compared to the previously expected range of 2% to 5%. The company also updated its full-year 2019 adjusted EBITDA guidance to be in the range of $330 million to $350 million, compared to the previously expected range of $410 million to $430 million.

For earnings history and earnings-related data on Resideo Technologies, Inc. (REZI) click here.

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