) reported better-than-expected results for second-quarter 2014.
Earnings came in at 6 cents per share, improving over a loss of 2
cents per share recorded in the year-ago quarter. The bottom-line
surpassed the Zacks Consensus Estimate of one cent.
Innovation and diversified product offerings drove Skullcandy's
upbeat earnings in the quarter.
Skullcandy, Inc - Earnings Surprise |
Skullcandy generated net revenues of $53.9 million, rising 6.0%
year over year but in line with the Zacks Consensus Estimate.
Revenue from the company's domestic operations grew 6% year over
year to $39.5 million, representing 73.3% of net revenues.
International revenues were $14.4 million, up 5.9% from $13.6
million in the year-ago quarter.
Cost of revenues advanced 5.8% year over year, representing 55.0%
of total revenue, slightly below 55.1% in the prior-year quarter.
Selling, general and administrative expenses, as a percentage of
total revenue, were 42.6%. Operating margin in the quarter was
Balance Sheet/ Cash Flow
Exiting second-quarter 2014, Skullcandy had cash and cash
equivalents of $44.1 million, down from $48.2 million in the
In first-half 2014, the company generated net cash of $7.1 million,
down 41.2% from $12.1 million in the year-ago comparable period.
Capital spending soared 74.4% year over year to $3.3 million.
For 2014, Skullcandy anticipates sales to grow in the mid to high
single digit range. Generally Accepted Accounting principles (GAAP)
earnings are predicted within 22−26 cents per share versus the
earlier projected range of 16−20 cents. GAAP operating income will
likely be in $8.3−$9.7 million range.
For the third quarter, sales are estimated to grow in the 7−9%
range while GAAP earnings will likely come within 2−5 cents per
With a market capitalization of nearly $189 million, Skullcandy
presently sports a Zacks Rank #1 (Buy). Other stocks worth
considering in the industry include Dolby Laboratories, Inc. (
), Panasonic Corporation (
) and Sharp Corporation (
). All these companies carry a Zacks Rank #2 (Buy).
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