Sierra Wireless gets to work with Numerex, amid 13% higher revenues in Q4

Friday 9 February 2018 | 11:48 CET | News
Sierra Wireless went back into the red after closing its acquisition of Numerex, but reported growth across of its three business segments. Cloud and Connectivity Services, now renamed IoT services after the inclusion of Numerex, recorded particularly high revenue growth. 

Group revenues and adjusted earnings per share all came in within expectations in the fourth quarter, going up 12.6 percent from the year before to USD 183.5 million and to 0.28 from 0.27 per share. Revenues at IoT services jumped 73.5 percent to USD 11.9 percent. They rose 3.4 percent at OEM Solutions to USD 139.8 million and leaped 52.0 percent at Enterprise Solutions to USD 31.8 million. Numerex contributed USD 3.1 million worth of revenues to the total.

The net result slipped to a loss of USD 3.5 million or USD 0.11 per diluted share, from a gain of 15.7 million and 0.49 per diluted share. The gross margin fell to 33.7 percent from 42.2 million while adjusted EBITDA slid to USD 13.9 million from 15.5 million. Operating expenses rose to USD 64.8 million from 49.6 million, with the loss from operations going to USD 3.0 million from a gain the year before of 19.2 million. 

For the first quarter, Sierra is guiding for revenues at USD 181-189 million and adjusted EPS at USD 0.04-0.10. The forecast includes a full quarter of Numerex as well as a few one-off charges related to a Numerex network upgrade and customer acquisition. The company also expects tight components supply to contrain revenue and to add to the cost of goods. 

Sierra has started a number of efficiency and effectiveness initiatives as its seeks to capture efficiency gains with Numerex. The company will look to reduce the cost of goods sold as well as operating expenses. As a result of the initiatives, it is targeting a quarterly adjusted operating expense run rate of USD 56.5 million in Q4 2018, down from the 59 million included in its guidance for Q1. These initiatives will result in a one-off charge of USD 4.5 million.

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