Audio tech firm Plantronics (PLT 56.98, +2.38) trades about 4.4% higher on Monday in reaction to the company’s mixed Q4 report and worse than expected June quarter guidance.
The Q4 print was mixed, with top line revenues missing market expectations at $209.0 million. Bottom line earnings came in ahead of expectations, though, at $0.81. Non-GAAP gross margins were 51.9% compared to 51.3% a year ago. Additionally, in Q4 PLT took additional cost reduction actions, resulting in a charge of $1.2 million, which when complete, are expected to result in about $3 million in annual cost savings.
Breaking segment results down, PLT’s Enterprise net revenues of $160.9 million were up 3%, or $4.7 million, driven by growth of revenue from Unified Communications headsets in the high teens. Remarking that Consumer product revenues were weaker than anticipated in the quarter, the segment ultimately posted net revenues of $48.1 million, down 10%, or $5.5 million, mostly driven by a larger than anticipated seasonal decline in both mono and stereo Bluetooth headset sales.
With the caveat that its business is inherently difficult to forecast, particularly with continuing uncertainty in regional economic conditions and currency fluctuations, with no assurance that expectations of incoming orders over the balance of the current quarter will materialize, PLT guided for Q1. Said guidance comes in modestly worse than the Street, with Q1 earnings expected between $0.70-0.80 per share on revenues in the range of $211-221 million. Further, on the conference call, management gave guidance for non-GAAP operating margins expansion of 50-60 basis points, but excluding litigation, the result will be higher.
Shares of PLT were pressured in the early going this morning, perhaps on the light guidance. However, as the conference call progressed and the session got into a groove, the stock settled into moderate gains. The company noted certain abnormal events in last year’s Q1 that will not occur this year, as well as largely expected continued weakness in the Consumer segment.