Comtech Income Declines 35% but Better Outlook Seen Next Quarter
Melville, N.Y., October 8, 2013 — Comtech Telecommunications Corp.'s fourth-quarter earnings fell 35 percent after posting sales declines throughout its operations, most notably in its mobile data communications segment. Comtech said net sales dropped to $84.4 million for the fourth quarter and $319.8 million for full year of fiscal 2013 ended July 31, 2013, compared to $112.8 million and $425.1 million for the same periods in fiscal 2012.
The company reported GAAP diluted EPS of $0.28 and $0.97 for the fourth quarter and full fiscal year ended July 31, 2013, respectively, compared to $0.38 and $1.42 for the comparative periods in fiscal 2012.
Despite the drop in sales, Comtech said they see improvements in the fourth quarter.
Fred Kornberg, President and Chief Executive Officer, said the fourth quarter was the highest quarter of bookings during the year and Comtech ended the year with solid backlog.
“As we look to fiscal 2014, we have seen signs of stabilization in certain of our end-markets and believe that we will achieve modest sales and operating income growth. Most importantly, we believe we are well-positioned for further growth when global business conditions meaningfully improve,” he said.
Comtech projects sales for fiscal 2014 to be between $320.0 million and $340.0 million while its GAAP diluted EPS is expected to be between $1.07 and $1.19. The company said adjusted EBITDA for fiscal 2014 is expected to be in the range of $53.0 million to $57.0 million.
Despite the drop in sales, Comtech shares managed to jump after the equipment maker equipment in satellite and other mobile communications systems reported a better-than-expected fiscal fourth quarter and a solid full-year forecast.
Analyst Raymond James said Comtech’s 4Q EPS was better-than-expected, but more importantly the company reported solid bookings and in-line FY14 guidance, suggesting that Comtech could be at an inflection point after years of declining revenues.
Shares also rose 8.3 percent to $26.09 after the company recorded its highest quarterly bookings number for the year.
The company reported a backlog as of July 31, 2013 of $189.7 million compared to $153.9 million as of July 31, 2012. Its total bookings for the three and twelve months ended July 31, 2013 rose to $144.0 million and $355.6 million, respectively, compared to $129.3 million and $434.0 million for the three and twelve months ended July 31, 2012.
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