Categories Earnings, Technology

Turtle Beach Q1 profit jumps 56% beats estimates

Turtle Beach Corporation (HEAR) reported a 56% jump in earnings for the first quarter of 2019 helped by a gain from the mark-to-market adjustment of the financial instrument obligation related to the non-cash settlement of the Series B Preferred stock in April 2018. The results exceeded analysts’ expectations.

Net income climbed 56% to $3.1 million, while earnings plunged 44% to $0.09 per share due to the exclusion of a $1.6 million gain on the financial instrument obligation. Adjusted earnings decreased by 18.8% to $0.13 per share.

Net revenue increased by 10% to $44.8 million. This was the result of continued momentum coming out of 2018, primarily driven by the exceptionally strong slate of triple-A game releases in holiday 2018.

Image Courtesy: Turtle Beach / Facebook post

Looking ahead into the full year 2019, the company still expects net revenue in the range of $240 million to $248 million and earnings in the range of $0.70 to $0.90 per share. Adjusted earnings are still anticipated to be in the range of $0.90 to $1.10 per share. Adjusted EBITDA is still predicted to be in the range of $27 million to $31 million.

For the first half of 2019, the company expects net revenue in the range of $85 million to $88 million and net loss in the range of $0.19 to $0.13 per share. Adjusted per share results are anticipated to be in the range of a loss of $0.03 to a profit of $0.04. Adjusted EBITDA is predicted to be in the range of $4 million to $5.5 million.

For the first quarter, the company’s gross margin decreased to 33% from 36.8% a year ago. This was primarily due to anticipated higher promotional allowances, including preparation for the RECON 70 launch, refurbishing costs incurred to support higher revenue, as well as channel mix.

Also read: Activision Blizzard Q1 earnings snapshot

Operating expenses increased by 16% due primarily to an increase in marketing spend associated with the new RECON 70 series headset launch, as well as the transaction and integration costs related to the pending ROCCAT acquisition.

The company announced the pending acquisition of leading PC gaming accessory business ROCCAT, which is expected to significantly expand its presence in the PC accessories market. Turtle Beach expects the pending acquisition of ROCCAT to lead to significant growth in sales and profits once it is fully integrated. This acquisition will more than double the company’s total addressable market to $4.7 billion and facilitate broader international expansion.

Following a year of unprecedented growth, Turtle Beach continues to expect that industry-wide sales of console gaming headsets will decline year-over-year in 2019 but also believes that the base of gamers seeking high-quality headsets for both console and PC has never been higher and will lead to resumed growth in 2020 and beyond. The company continues to expect its revenue to grow over the long-term at a compounded rate of 10%-20%.

Shares of Turtle Beach ended Wednesday’s regular session up 1.03% at $10.81 on the Nasdaq. Following the earnings release, the stock inched up over 4% in the after-market session.

 

Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips.

Most Popular

Does Unity Software (U) stock has more room to run?

Last month, the IPO market was in a full swing. IPOs of Snowflake (NYSE: SNOW) and JFROG (NASDAQ: FROG) had an impressive opening day in September, the former creating a

PepsiCo (PEP): Steady snacking habits amid pandemic drive strong quarter for beverage giant

PepsiCo Inc. (NASDAQ: PEP) beat market expectations on both revenue and earnings for the third quarter of 2020. The company saw the momentum continue in its snacks business while the

Does the virus-driven boom make Electronic Arts (EA) a good investment?

With more and more people turning to virtual entertainment sources, amid the virus-related movement restrictions, video game publishers like Electronic Arts (NASDAQ: EA) are witnessing unusually high demand. Not surprisingly,

One thought on “Turtle Beach Q1 profit jumps 56% beats estimates

Leave a Reply

Your email address will not be published. Required fields are marked *

Add Comment
Loading...

Cancel
Viewing Highlight
Loading...
Highlight
Close
Top