Shares of Resideo Technologies (NYSE: REZI), the Austin, Texas-based maker of temperature and humidity control, water, air, and software solutions products, look likely to close as much as 12.5% higher as we enter the final quarter hour of stock trading on Tuesday.
Why? Earlier today, Resideo reported its financial results for Q2 2020, showing sales very close to the $1.02 billion that Wall Street had forecast for it, and pro forma earnings more than four times estimates -- at $0.17 per share.
Yet the news wasn't all good. While close to estimates, the $1 billion in sales that Resideo reported were still down 17% from Q2 2019 levels. And while the company reported a strong pro forma profit, when calculated according to generally accepted accounting principles (GAAP), Resideo actually ended up with a loss for the quarter -- $0.62 per share.
COVID-19 was, of course, a big part of the reason that sales declined and losses widened. But the news could have been worse than it was -- and the fact that it wasn't seems to be good enough for investors today.
As for tomorrow, Resideo CEO Jay Geldmacher says his company saw good "momentum ... exiting the second quarter" and is now "well-positioned to weather near-term challenges" in Q3 and beyond.
Geldmacher didn't give any hard numbers for forward guidance, but for what it's worth, analysts are forecasting continued profits through year-end and a final tally of as much as $0.52 per share in pro forma profit by the time 2020 wraps up.
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