Turtle Beach Corporation (NASDAQ: HEAR) reported lower revenues and earnings for the fourth quarter. The results, however, exceeded the market’s estimates and the company’s stock rose sharply on Tuesday evening.
Revenues dropped to $101.8 million from $111.3 million in the fourth quarter of 2018, but exceeded the consensus estimate. Last year, sales were boosted by record levels of demand due to new users buying their first headset for Battle Royale games.
Consequently, earnings, excluding special items, declined 38% year-over-year to $0.83 per share. Analysts were looking for a smaller number. Unadjusted net income was $20.4 million or $1.29 per share in the fourth quarter, compared to $24.6 million or $1.33 per share in the year-ago quarter.
Juergen Stark, CEO of Turtle Beach, said, “While we expect the console gaming market to be soft as consumers prepare for Sony and Microsoft’s new consoles slated to launch this fourth quarter, we expect the market to return to growth in 2021. We anticipate continued growth in our PC gaming accessories sales in 2020 and plan to invest in product and brand development to increase our share in this attractive portion of the market.”
Anticipating an uptick in the PC gaming segment this year, the management forecasts revenues in the range of $29 million to $31 million for the first quarter, when the company is expected to incur a loss of $0.72-$0.80 per share, on an adjusted basis. Unadjusted loss is forecast to be between $0.73 per share and $0.81 per share.
For the whole of 2020, Turtle Beach expects revenue to be in the range of $214 million to $224 million and adjusted EBITDA between $5 million and $10 million. The estimate for adjusted loss is $0.12-$0.45 per share, while unadjusted loss is forecast to be between $0.13 per share and $0.46 per share.
Turtle Beach’s shares closed Tuesday’s regular session flat and gained sharply during the extended session, after staying in a downward spiral for several days. The stock has lost 58% in the past twelve months and 39% since the beginning of the year.
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