Comtech Telech Earnings: Revenue Ticks Lower, Stock Falls Hard

Comtech Telecommunications Corp. (NASDAQ:CMTL) posted a decrease in profit as revenue declined. Comtech Telecommunications designs, develops, produces, and markets innovative products, systems, and services for advanced communications solutions.

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Comtech Telecommunications Corp Earnings Cheat Sheet for the First Quarter

Results: Net income for Comtech Telecommunications Corp. fell to $7.4 million (36 cents per share) vs. $12.6 million (47 cents per share) a year earlier. This is a decline of 41% from the year-earlier quarter.

Revenue: Fell 19.8% to $91 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Comtech Telecommunications Corp. beat the mean analyst estimate of 30 cents per share. It fell short of the average revenue estimate of $97.8 million.

Quoting Management: In commenting on the Company’s performance and business outlook, Fred Kornberg, President and Chief Executive Officer, stated, “Despite difficult market conditions, we are pleased with our first quarter results and the strong cash flows generated from our business.” Mr. Kornberg added, “Although our long term growth plans have not changed, we believe that the U.S. government’s failure to resolve the “fiscal cliff” has resulted in increased uncertainty throughout our customer base. As such, we have adjusted our fiscal 2013 business outlook and updated our guidance accordingly.”

Key Stats:

The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 7 cents in the fourth quarter of the last fiscal year, by 5 cents in the third quarter of the last fiscal year, and by 5 cents in the second quarter of the last fiscal year.

Revenue has fallen in the past four quarters. Revenue declined 19.6% to $112.8 million in the fourth quarter of the last fiscal year. The figure fell 23.9% in the third quarter of the last fiscal year from the year earlier and dropped 39.1% in the second quarter of the last fiscal year from the year-ago quarter.

Net income has dropped 49.3% year-over-year on average across the last five quarters. Performance was hurt by a 63.8% decline in the second quarter of the last fiscal year from the year-earlier quarter.

The company’s cost of sales slipped to $49.1 million, a dip of 54.8% from a year ago. Last quarter, cost of sales was 54% of revenue versus 54.8% a year earlier.

Looking Forward: Over the past ninety days, the average estimate for the second quarter has fallen from 36 cents per share to 35 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. The average estimate for the fiscal year is $1.43 per share, down from $1.46 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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