Plantronics (POLY) Beats Q1 Earnings Estimates on Top-Line Growth

Plantronics, Inc. POLY reported healthy first-quarter fiscal 2022 results, wherein both the bottom line and the top line beat the respective Zacks Consensus Estimate. Despite supply-chain adversities due to the global semiconductor chip shortage, Poly (the name under which Plantronics markets itself) recorded solid top-line growth backed by diligent execution of operational plans.

Net Income

On a GAAP basis, net loss in the June quarter was $36.8 million or loss of 88 cents per share compared with a net loss of $75 million or loss of $1.85 per share in the prior-year quarter. The significant improvement was primarily driven by higher revenues.

Non-GAAP net income came in at $26.5 million or 60 cents per share compared with $13.3 million or 33 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 14 cents, delivering a surprise of 30.4%.

Revenues

Quarterly total GAAP revenues grew 21.2% year over year to $431.2 million. Non-GAAP revenues were $432.4 million, up from $360.8 million and exceeded the consensus estimate of $418 million. The growth was primarily driven by video, which nearly doubled to $138 million from $71 million, and voice products, which increased to $61 million from $46 million. This reflects the massive shift toward reliable, high-fidelity solutions for hybrid work and video collaboration.

Product revenues increased 27.3% year over year to $371.2 million while services revenues were $60 million, down from $64.3 million. Region wise, the Americas generated the bulk of revenues ($229 million), followed by EMEA (Europe, Middle East and Africa, $126 million) and APAC (Asia Pacific, $77 million).

Other Quarterly Details

Gross profit improved to $175.2 million from $156.3 million in the prior-year quarter, with respective margins of 40.6% and 43.9%. Total operating expenses decreased to $195.2 million from $213.6 million. Operating loss was $20 million compared with operating loss of $57.2 million a year ago. Adjusted EBITDA improved to $61.5 million from $47.7 million.

Cash Flow & Liquidity

In the first three months of fiscal 2022, Poly generated $0.8 million of net cash from operating activities compared with $41.7 million in the year-ago period. As of Jul 3, 2021, the company had $196.8 million in cash and cash equivalents with $1,497.1 million of long-term debt.

Q2 Guidance

For the second quarter of fiscal 2022, Poly expects GAAP revenues between $420 million and $440 million. Adjusted EBITDA is anticipated in the range of $50 million to $60 million. Non-GAAP earnings per share are estimated between 50 cents and 70 cents.

Zacks Rank & Stocks to Consider

Poly currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader industry are Clearfield, Inc. CLFD, sporting a Zacks Rank #1 (Strong Buy), and TESSCO Technologies Incorporated TESS and SeaChange International, Inc. SEAC, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Clearfield delivered an earnings surprise of 49%, on average, in the trailing four quarters.

TESSCO delivered an earnings surprise of 2.5%, on average, in the trailing four quarters.

SeaChange International has a long-term earnings growth expectation of 10%. It delivered an earnings surprise of 12.2%, on average, in the trailing four quarters.