ADT Corp Earnings: Here’s Why Investors are Selling Shares Now

The ADT Corporation (NYSE:ADT) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 2.61%.

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The ADT Corporation Earnings Cheat Sheet

Revenue: Was the same at $821 million as the year-earlier quarter.

Actual vs. Wall St. Expectations: The ADT Corporation reported adjusted EPS income of $0.41 per share. By that measure, the company missed the mean analyst estimate of $0.43. It missed the average revenue estimate of $823.48 million.

Quoting Management: Naren Gursahaney, ADT’s Chief Executive Officer, said, “Our results this quarter reflect continued solid growth in recurring revenue, which is a key element of our business model, along with further improvement in take rates for ADT Pulse. One out of every three new customers in our residential direct channel is a Pulse subscriber and our efforts to increase penetration of Pulse in the small business and dealer channels are showing great success, with very strong growth in each of those channels. Capital management continues to be a major focus for us, and thus far we have repurchased $800 million of our shares under the $2 billion authorization we announced last November.” Gursahaney added, “Over the balance of the fiscal year we will focus on continuing to grow our customer base, controlling costs to improve margins and returning excess cash to our shareholders.”

Key Stats (on next page)…

Revenue increased 1.48% from $809 million in the previous quarter. EPS decreased 6.82% from $0.44 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.45 to a profit $0.44. For the current year, the average estimate has moved up from a profit of $1.78 to a profit of $1.79 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at]