Comtech Telecom Earnings: Not Enough to Please Shareholders

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 Fourth Quarter

Results: Net income for Comtech Telecommunications Corp. fell to $7.9 million (38 cents per share) vs. $11.9 million (42 cents per share) a year earlier. This is a decline of 33.3% from the year-earlier quarter.

Revenue: Fell 19.6% to $112.8 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Comtech Telecommunications Corp. reported adjusted net income of 45 cents per share. By that measure, the company beat the mean estimate of 38 cents per share. It beat 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, “Although market conditions remain challenging, we posted solid results in the fourth quarter and achieved our highest level of quarterly bookings in fiscal 2012.” Mr. Kornberg added, “We enter fiscal 2013 with optimism and we continue to take steps to focus on our core businesses and to appropriately respond to the ever-changing business environment.”

Key Stats:

The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 5 cents in the third quarter, by 5 cents in the second quarter, and by 12 cents in the first quarter.

Revenue has fallen in the past four quarters. Revenue declined 23.9% to $99.8 million in the third quarter. The figure fell 39.1% in the second quarter from the year earlier and dropped 36.4% in the first quarter from the year-ago quarter.

Margins were up in the third quarter, following a drop in the previous quarter. Gross margin grew 1.6 percentage points from the year-earlier quarter to 43.6%. In the second quarter, the figure rose 1.7 percentage points to 41.8% from the year earlier quarter.

Net income has dropped 43.4% year-over-year on average across the last five quarters. Performance was hurt by a 63.8% decline in the second quarter from the year-earlier quarter.

Looking Forward: Expectations for the company’s next-quarter results are lower than they have been. Over the past sixty days, the average estimate for first quarter of the next fiscal year has fallen from 33 cents per share to 32 cents. At $1.41 per share, the average estimate for the fiscal year has risen from $1.37 sixty days ago.

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

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