Sierra Wireless (SWIR) Stock Up on Better than Expected 3Q Earnings

Shares of the Sierra Wireless Inc. (SWIR) were trading up +5.46 or +20.57 percent to $32.00 per share in Thursday's premarket after the company announced better than expected results for the company fiscal third quarter. Sierra Wireless stock closed at $26.54, down -1.28 or -4.60 percent in Wednesday's regular trading session.

Richmond, British Columbia, Canada based Sierra Wireless Inc. is a transnational wireless communications equipment designer and manufacturer with offices in France, California, Hong Kong and Guangdong in the People's Republic of China.
The company specializes in designing and marketing mobile computing and M2M â?? machine to machine â?? communication products used over wireless networks. Sierra Wireless' products include 2G, 3G and 4G mobile broadband wireless modems, routers and software and services for the mobile broadband market. The company also holds 550 unique patents for technologies such as built-in antennas, product form factors and the use of battery power. Sierra currently has patents pending in Asia, Australia, Mexico, South Africa, the US and Europe.

Sierra Wireless reported third quarter earnings per share of +$0.24, beating the analyst consensus of +$0.13 by +$0.11. Quarterly revenue came in at $143 million compared to the consensus estimate of $138.8 million and six percent higher than the previous quarter's $135 million. Guidance for the company's fourth quarter has earnings of +$0.25 to +$0.28 per share compared to analyst estimates of +$0.17, while revenue is expected to be between $145 million and $148 million versus an analyst consensus of $142.4 million.

Jason Cohenour, President and Chief Executive Officer said in the company's press release that, "In the third quarter of 2014, we leveraged our global leadership position in M2M to drive record revenue and strong profitability," He continued saying that, "In the fourth quarter, we expect to deliver continued growth in revenue and profitability. While executing operationally, we will continue to pursue acquisitions that help accelerate our growth and enhance our strategic position."

The company's cash flow improved in the third quarter, after receiving $26.7 million in free cash flow, Sierra has increased its cash on hand to $196.1 million, a record for the company. OEM (Original Equipment Manufacturer) Solutions increased at a record rate of +29.7 percent year on year at $124.3 million. Nevertheless, the company's Enterprise Solutions improved revenue by only +15.4 percent year on year with a total of +$19 million in the third quarter.

Sierra Wireless earnings have been steadily increasing since the last quarter of 2013, while adjusted earnings per share have doubled since Q4 of 2013 and are expected to triple by this year's fourth quarter. The company's stock has also been on an uptrend, having made a new yearly high of 30.55 on September 18th.

This morning's action in the stock will push it to a new yearly high and a level not seen in the stock in roughly ten years. Sierra stock was trading in the mid $60s in 2000 and will most likely continue to appreciate in the near term if the company can deliver on their fourth quarter guidance.

Other News About Sierra Wireless
Sierra Wireless to present at RBC Capital Markets Technology Conference on November 10, 2014
Company will be presenting their technology in New York on November 10-12th.
Sierra Wireless collaborates with Octo Telematics for usage-based insurance solution in Europe
Sierra will provide additional connectivity to Octo's insurance platform.

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Published on Nov 6, 2014
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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