Universal Electronics Inc. (UEIC) posted first-quarter 2010 results after the closing bell on Thursday. The company’s net income more than doubled to $1.8 million or 13 cents per share from $796,000 or 6 cents per share in the year-ago quarter primarily driven by stringent cost containment initiatives. Quarterly earnings still missed the Zacks Consensus Estimate of 16 cents.
Universal Electronics designs, develops, and delivers innovative solutions that enable consumers to control entertainment devices, digital media, and home systems. The company’s portfolio of technologies and infrared control software are utilized by companies in the consumer electronics, subscription broadcast and computing industries.
During the first quarter of 2010, Universal Electronics recorded a marginal 0.4% growth in revenues to $71.4 million, from $71.1 million in the year-ago period. The growth was primarily driven the Consumer category, which grew by a 9.8% year-over-year to $11.2 million, partially offset by a 1.1% year-over-year decline in the Business category to $60.2 million.
Universal Electronics gross profit logged a growth of 2.9% year-over-year to $22.1 million, while gross margin expanded by 80 basis points (bps) to 30.9%. The growth was mainly attributable to increased revenues from the high-margin Consumer category partially offset by higher freight costs. Selling, general and administrative expenses decreased 6.6% year-over-year to $16.6 million primarily due to string cost containment initiatives undertaken by management. Accordingly, operating income surged by 74.9% to $2.7 million from $1.5 million in the year-ago period, while operating margin expanded by 160 bps to 3.8%.
Universal Electronics exited the quarter with cash and cash equivalents of $79.4 million, compared to $17.4 million in the year-ago quarter. During the quarter, the company generated $4.9 million of cash from operations and deployed $1.3 million of cash towards share buyback and $1.2 million towards capital expenditure.
Moving forward, Universal Electronics expects sales for the second quarter of 2010 to range between $76.5 million and $79.5 million, while earnings are expected between 25 cents and 29 cents per share. The guidance is in line with the Zacks Consensus Estimate of 27 cents per share, which dipped by 2 cents in just the past week.
For full-year 2010, Universal Electronics anticipates sales of $325.0 million to $340.0 million and earnings of $1.20 to $1.35 per share. This guidance is also in line with the Zacks Consensus Estimate of $1.30 per share, which moved down by 12 cents over the past month as 3 of 5 covering analysts lowered expectations.
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