The Q3 2014 earnings report for small cap audio stock Skullcandy Inc (NASDAQ: SKUL), a potential peer of other audio stocks like mid cap Harman International Industries Inc (NYSE: HAR) and small cap Koss Corporation (NASDAQ: KOSS), is scheduled for after the market's close on Wednesday (November 5th). Aside from the Skullcandy Inc earnings report, it should be said that Harman International Industries Inc reported Q1 2015 earnings on October 30th (net sales increased 22% to $1.4B and net income rose 37% to $92M thanks to robust demand for car audio products) while Koss Corporation reported Q1 2015 earnings on October 22nd (sales fell 19.9% to $5,469,486 as sales continued to be soft in Europe and there was a net loss of $94,998 verses net income of $79,402). Traders with long memories though might remember that in late 2012, Skullcandy Inc had the dubious distinction of being the market's most shorted stock (see: Long Live the Shorts or the Short Squeeze? SKUL, AM & UBNT) with short interest of 86.47%.
What Should You Watch Out for With the Skullcandy Inc Earnings Report?First, here is a quick recap of Skullcandy Inc's recent earnings history along with EPS estimate trends from the Yahoo! Finance analyst estimates page:
Earnings HistorySep 13Dec 13Mar 14Jun 14| EPS Est | 0.02 | 0.09 | -0.17 | 0.01 |
| EPS Actual | 0.06 | 0.13 | -0.12 | 0.06 |
| Difference | 0.04 | 0.04 | 0.05 | 0.05 |
| Surprise % | 200.00% | 44.40% | 29.40% | 500.00% |
Sep 14Next Qtr.
Dec 14Current Year
Dec 14Next Year
Dec 15
| Current Estimate | 0.04 | 0.26 | 0.24 | 0.33 |
| 7 Days Ago | 0.04 | 0.26 | 0.23 | 0.33 |
| 30 Days Ago | 0.04 | 0.26 | 0.23 | 0.33 |
| 60 Days Ago | 0.04 | 0.26 | 0.24 | 0.33 |
| 90 Days Ago | 0.05 | 0.26 | 0.23 | 0.32 |
Top 5 Telecom Stocks For 2015
At the end of last July, Skullcandy Inc's reported net sales had increased 6.0% to $53.9 million as Domestic net sales increased 6.0% to $39.5 million while International net sales increased 6.1% to $14.4 million primarily due to increased sales in Canada, and to a lesser extent Mexico and China. Gross margin came in at 45.0% verses 44.9%; selling, general and administrative expense was $22.9 million verses $24.0 million; and net income was $1.6 million verses a net loss of $0.6) million. The CEO commented:
"We continue to excite our consumer through great new products combined with our authentic brand born from innovation, creativity, music, and sports. The successful actions the team has taken toward achieving our key objectives resulted in solid full priced selling and second quarter profitability that exceeded expectations. While we delivered a solid second quarter performance, I am even more excited for the back half of the year when we launch our ultra-secure Sports Performance line with Sticky Gel technology and bring to the market some of the most bombproof and fun wireless products on the market. Most importantly, the investments we are making in our team, culture, demand creation, and innovation, are positioning Skullcandy for long-term growth and sustained leadership."
On the news front and late September, the CEO of Skullcandy Inc was interviewed by The Street after ringing the closing Nasdaq bell. He said new product launches (e.g. Bluetooth and wireless headphones, take-anywhere speakers etc) ahead of the 2014 holiday season along with cleaned up distribution will help drive revenue and earnings for the company. He also pointed out that audio is a huge part of the lives of young people now.
In addition, UK based consulting and research firm Futuresource Consulting said worldwide shipments of headphones rose nearly 10% last year to reach 286 million units, with no end to the market growth in sight. They expect headphone shipments to rise 8% this year to 309 million units and then rising steadily for the next four years to hit 355 million units in 2018. Futuresource analyst Rasika Iyer stated:
"We're seeing nothing short of a headphones renaissance… With prices ranging from less than $5 to more than $200 and a gamut of features, consumers have now started to purchase different sets of headphones for different applications, including commuting, sport and in-home listening. In Europe and North America, we're seeing headphone ownership reaching three to four pairs on average, though this includes headphones bundled with smartphones."
The latest technical chart for small cap Skullcandy Inc shows a spike during the spring and a mild uptrend since the summer:
A long term performance chart shows that investors have been losers with small caps Skullcandy Inc and Koss Corporation while mid cap Harman International Industries Inc took off last year and well into this year:
A technical chart for Harman International Industries Inc shows conflicting trends while Koss Corporation has been in a pretty steady and nasty downtrend:
Given how important audio has become, it might be worth it to revisit Skullcandy Inc or to take a close look at the coming earnings report and earnings call along with a few other stocks in the space like Harman International Industries Inc.
No comments:
Post a Comment