Turtle Beach Corporation (HEAR) reported a 56% jump in earnings for the first quarter of 2019 helped by a gain from the mark-to-market adjustment of the financial instrument obligation related to the non-cash settlement of the Series B Preferred stock in April 2018. The results exceeded analysts’ expectations.
Net income climbed 56% to $3.1 million, while earnings plunged 44% to $0.09 per share due to the exclusion of a $1.6 million gain on the financial instrument obligation. Adjusted earnings decreased by 18.8% to $0.13 per share.
Net revenue increased by 10% to $44.8 million. This was the result of continued momentum coming out of 2018, primarily driven by the exceptionally strong slate of triple-A game releases in holiday 2018.
Looking ahead into the full year 2019, the company still expects net revenue in the range of $240 million to $248 million and earnings in the range of $0.70 to $0.90 per share. Adjusted earnings are still anticipated to be in the range of $0.90 to $1.10 per share. Adjusted EBITDA is still predicted to be in the range of $27 million to $31 million.
For the first half of 2019, the company expects net revenue in the range of $85 million to $88 million and net loss in the range of $0.19 to $0.13 per share. Adjusted per share results are anticipated to be in the range of a loss of $0.03 to a profit of $0.04. Adjusted EBITDA is predicted to be in the range of $4 million to $5.5 million.
For the first quarter, the company’s gross margin decreased to 33% from 36.8% a year ago. This was primarily due to anticipated higher promotional allowances, including preparation for the RECON 70 launch, refurbishing costs incurred to support higher revenue, as well as channel mix.
Also read: Activision Blizzard Q1 earnings snapshot
Operating expenses increased by 16% due primarily to an increase in marketing spend associated with the new RECON 70 series headset launch, as well as the transaction and integration costs related to the pending ROCCAT acquisition.
The company announced the pending acquisition of leading PC gaming accessory business ROCCAT, which is expected to significantly expand its presence in the PC accessories market. Turtle Beach expects the pending acquisition of ROCCAT to lead to significant growth in sales and profits once it is fully integrated. This acquisition will more than double the company’s total addressable market to $4.7 billion and facilitate broader international expansion.
Following a year of unprecedented growth, Turtle Beach continues to expect that industry-wide sales of console gaming headsets will decline year-over-year in 2019 but also believes that the base of gamers seeking high-quality headsets for both console and PC has never been higher and will lead to resumed growth in 2020 and beyond. The company continues to expect its revenue to grow over the long-term at a compounded rate of 10%-20%.
Shares of Turtle Beach ended Wednesday’s regular session up 1.03% at $10.81 on the Nasdaq. Following the earnings release, the stock inched up over 4% in the after-market session.
Energy giant ExxonMobil Corporation (NYSE: XOM) reported a profit for the second quarter of 2021, compared to a loss last year, even as operating conditions continued to improve. The results
Caterpillar Inc (NYSE: CAT) reported second-quarter 2021 financial results before the regular market hours on Friday. The manufacturer of construction machinery and equipment reported Q2 revenue of $12.9 billion, up
Chevron Corporation (NYSE: CVX) reported second-quarter 2021 earnings results today. Total revenues amounted to $37.5 billion compared to $13.4 billion in the year-ago period. The reported net income was $3.1