SeaChange International Earnings: Here’s Why the Stock is Down Now

SeaChange International Inc. (NASDAQ:SEAC) delivered a profit and beat Wall Street’s expectations, BUT 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 3.67%.

SeaChange International Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 150% to $0.1 in the quarter versus EPS of $0.04 in the year-earlier quarter.

Revenue: Rose 1.74% to $37.38 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: SeaChange International Inc. reported adjusted EPS income of $0.1 per share. By that measure, the company beat the mean analyst estimate of $0.09. It missed the average revenue estimate of $38.35 million.

Quoting Management: “We are pleased that, in the second quarter, we achieved sequential and year over year increases in revenues and operating income and substantial growth in gross margins, which exceeded 57 percent,” said Raghu Rau, Chief Executive Officer, SeaChange. “Our results would have been even better but for delays in receiving timely acceptance within the quarter for some of our new generation software products because of ongoing custom integrations with third-party products. We continued to make significant market progress including an Adrenalin rollout with one of the largest U.S. cable television operators, and Adrenalin and VOD advertising acceptance by a large European telco. We have also announced a large number of deployments, domestically and internationally, for our market-leading content management solutions. And we continued our Nucleus gateway software momentum with two more design wins.”

Key Stats (on next page)…

Revenue increased 5.15% from $35.55 million in the previous quarter. EPS increased 233.33% from $0.03 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 $0.19 to a profit $0.18. For the current year, the average estimate has moved down from a profit of $0.65 to a profit of $0.64 over the last ninety days.

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