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Shares of ADT Inc. Decline 10% on Q2 Results -- and Why It Could Get Worse for Investors

Man sitting on couch with tablet showing security camera views.

What happened?

Shares of ADT Inc. (NYSE: ADT) , a leading provider of security and automation solutions in the U.S. and Canada for homes and businesses, ended Thursday's trading session down 10% after its second-quarter loss improved, compared to the prior year, but it didn't improve enough for Wall Street.

So what

Revenue increased 6% during the second quarter to $1.13 billion, compared to the prior year, which was in line with analysts' estimates. The company's net loss of $67 million improved by 28%, but its adjusted loss checked in at $0.07 per share, compared to analysts' estimates calling for adjusted earnings of $0.10 per share.

Man sitting on couch with tablet showing security camera views.

Image source: Getty Images.

"Our team made great progress delivering across the key operating metrics that drove our financial performance this quarter, including stronger cash flow generation," stated Tim Whall, ADT's Chief Executive Officer, in a press release. "We also further strengthened our critical role at the center of the connected home while continuing to capitalize on attractive opportunities in the commercial business."

Now what

The second quarter wasn't all bad, as ADT improved its customer retention and subscriber acquisition cost, and even slightly upped the low-end range of its full-year revenue and adjusted-EBITDA guidance. However, despite ADT's improvement, it was well short of the improvement -- and profitability -- analysts expected. The worst may not be over for ADT investors as the competition intensifies and its debt remains a concern .

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Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

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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