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Axon Enterprise (AAXN) Q4 Earnings Lag & Sales Top Estimates

Axon Enterprise, Inc.AAXN delivered adjusted earnings per share of 8 cents in the fourth quarter, missing the Zacks Consensus Estimate of 11 cents. On a year-over-year basis, earnings declined 53%.

Including one-time items, Axon Enterprise reported earnings per share of 3 cents per share in the quarter against a loss of 4 cents a year ago.

Operational Update

Sales in the quarter increased 21.3% year over year to $114.8 million, beating the Zacks Consensus Estimate of $104.7 million. International revenues were up 52% year over year to $24 million. Cost of goods sold increased 56.3% to $49.4 million from $31.6 million in the prior-year quarter. Gross profit rose 3.7% year over year to $65.3 million. Gross margin expanded 360 basis points to 56.9% year over year. Adjusted EBITDA in the quarter was down 24.7% to $10.9 million.

Selling, general and administrative expenses increased 6.3% year over year to $42 million. Axon Enterprise reported an operating income of $2 million compared with $8 million in the year-ago quarter, showing a decline of 74%.

Segment Performance

TASER segmen t report ed revenues of $65.3 million in the fourth quarter, up 1.4% from $64.4 million in the prior-year quarter. The segment's gross profit declined 7.2% to $42.4 million from $45.7 million in the prior-year quarter.

Revenues at the Software and Sensors segment jumped 63.6% to $49.5 million from the year-ago quarter. Gross profit for the segment increased 32.3% to $23 million from $17.3 million in the year-ago quarter. Software and Sensors bookings were $110 million, reflecting an increase of 54% year over year.

Financial Position

Axon Enterprise had cash and cash equivalents of $349 million at the end of 2018, compared with $75 million at 2017-end. Net cash provided by operating activities was $63.9 million in 2018 compared with $18.5 million in 2017.

2018 Results

Axon Enterprise reported adjusted earnings per share of 74 cents in 2018, up 68% from 44 cents in the prior year. Earnings missed the Zacks Consensus Estimate of 79 cents. Including one-time items, the company reported earnings per share of 50 cents compared with the prior year's 10 cents.

Sales increased 22% year over year to $420 million in 2018. The top line beat the Zacks Consensus Estimate of $410 million.

Guidance

Axon Enterprise expects revenues in the range of $480-$490 million in 2019 driven by new cloud-connected products, which include TASER 7 and Axon Fleet 2. For 2019, adjusted EBITDA is estimated between $80 million and $85 million. Revenues for first-quarter 2019 are expected to increase 8-9% year over year.

Zacks Rank & Other Stocks to Consider

Axon Enterprise currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the Industrial Products sector are Mueller Industries, Inc. MLI , Alarm.com Holdings, Inc. ALRM and Albany International Corp. AIN , each sporting a Zacks Rank #1 at present. You can see the complete list of today's Zacks #1 Rank stocks here.

Mueller Industries has an expected earnings growth rate of 2.2% for 2019.

Alarm.com has an expected earnings growth rate of 7.8% for 2019.

Albany International has an expected earnings growth rate of 44.7% for 2019.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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