iRobot Feels the Pinch of Higher Tariffs
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After the markets closed on Tuesday, iRobot (NASDAQ: IRBT) announced second-quarter 2019 results, including solid revenue growth that met the company's expectations and -- thanks to astute cost-management efforts -- significantly better-than-expected earnings.
But the home robotics specialist also tempered its full-year outlook on concerns over the ongoing impact of tariffs and the U.S.-China trade war, leaving shares down more than 16% in after-hours trading as of this writing.
iRobot management will shed more light on its performance in a conference call Wednesday morning. In the meantime, let's have a closer look at how it ended the first half.
IMAGE SOURCE: IROBOT.
iRobot results: The raw numbers
| Metric | Q2 2019 | Q2 2018 | Growth |
|---|---|---|---|
| Revenue | $260.2 million | $226.3 million | 15% |
| GAAP net income | $7.2 million | $10.5 million | (31.4%) |
| GAAP earnings per share (diluted) | $0.25 | $0.37 | (32.4%) |
Data source: iRobot quarterly filings. GAAP = generally accepted accounting principles.
What happened with iRobot this quarter?
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iRobot doesn't provide specific quarterly guidance, so while we don't usually pay close attention to Wall Street's expectations, most analysts were modeling significantly lower earnings of $0.03 per share on higher revenue of $268 million.
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On a non-GAAP (adjusted) basis -- which excludes items like unusual tax adjustments, acquisition costs, and stock-based compensation -- iRobot's net income was $13.8 million, or $0.48 per share, down from $0.77 per share in the same year-ago period.
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Domestic revenue grew 11.6% to $124.5 million.
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International revenue grew 18.2% to $135.7 million.
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As promised, iRobot launched two new products during the quarter, including its new Roomba s9+ robotic vacuum and the Braava jet m6 floor-mopping robot. The company still plans to launch Terra, its first-ever robotic lawn mower, later this year.
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In June, iRobot acquired educational robot leader Root Robotics for an undisclosed sum.
What management had to say
iRobot Chairman and CEO Colin Angle noted the company achieved double-digit percent growth in every major geographic region, and credited the company's outsized profits to its decision to take "steps to adjust spending during the quarter."
Angle further called their recent new product launches "an important milestone in [iRobot's] plans to strengthen Roomba leadership, extend the portfolio beyond vacuuming, and advance our position in the Smart Home."
But he also lamented the impact of the ongoing U.S.-China trade war, stating: