On an adjusted basis net income for the third quarter rose to $1.50 per share, compared to $1.34 per share in the same quarter last year. Wall Street was expecting Q3 earnings of just $0.52 per share.
Trading of IRBT shares were halted just minutes ahead of the earnings announcement. When trading restarted, it fell almost 16%, on slashed revenue guidance for the holiday quarter. The stock has tumbled 28% since the beginning of this year.
Outlook
The company narrowed its outlook on fiscal year 2019 revenue and operating income. It currently expects revenues for the full year in the range of $1.2 billion – $1.21 billion and operating income in the range of $75 million – $80 million.
Meanwhile, the guidance on full year EPS was narrowed to $2.60 – $2.80, from the prior estimate of $2.40 – $3.15.
CEO Colin Angle said, “Higher revenue in combination with favorable gross margins and disciplined spending enabled us to deliver strong quarterly operating income and EPS.”
The company had last quarter stated that it sees the recently implemented 25% tariffs to constrain its US market segment growth in the second half of the year.
Though the company is in the process of shifting production from China to Malaysia to offset some of the tariff headwinds, any material impact from these activities will take at least another two quarters to shape up.