IRobot (IRBT) reports second-quarter loss, topping revenue estimates

IRobot (IRBT) came out with a quarterly loss of $1.42 per share versus the Zacks Consensus Estimate of a loss of $1.69. That compares to a loss of $0.35 per share a year earlier. These numbers were adjusted for one-time items.

This quarterly report presented an earnings surprise of 15.98%. A quarter ago, it was expected that this robotics technology company would post a loss of $1.32 per share when it actually produced a loss of $1.67, delivering a surprise of -26.52%.

Over the last four quarters, the company has topped consensus earnings per share estimates only once.

iRobot, which belongs to the Zacks Industrial Automation and Robotics industry, posted revenues of $236.57 million for the quarter ended June 2023, surpassing the Zacks Consensus Estimate by 5.39%. This compares to the prior-year revenues of $255.35 million. The company has surpassed the consensus revenue estimate two times over the last four quarters.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.

IRobot shares have lost approximately 18.8% since the beginning of the year compared to the S&P 500’s increase of 17.7%.

What’s next for iRobot?

While iRobot has underperformed the market this year, the question that comes to investors’ minds is: What’s next for the stock?

There are no easy answers to this key question, but one reliable metric that can help investors address this issue is the company’s earnings outlook. This includes not only the current consensus earnings expectations for the coming quarters, but also how those expectations have changed recently.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings report, the estimate revision trend for iRobot is mixed. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. As such, the stock is expected to perform in line with the market in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the coming days. The current consensus EPS estimate is -$1.59 on $258.75M in revenues for the coming quarter and -$5.95 on $969.92M in revenues for the current fiscal year.

Investors should be aware that industry prospects can also have a material impact on stock performance. In terms of the Zacks Industry Rank, Industrial Automation and Robotics is currently in the bottom 18% of 250+ Zacks industries. Our research shows that the top 50% of Zacks industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the broader Zacks Industrial Products sector, EnerSys (ENS), has not yet released earnings for the quarter ended June 2023. The results are expected to be released on August 9.

The industrial battery maker is expected to report quarterly earnings of $1.80 per share in its upcoming report, representing a year-over-year change of +56.5%. The consensus earnings per share estimate for the quarter has been revised down 2.8% over the past 30 days to the current level.

EnerSys revenue is expected to be $952.97 million, up 6% from the same quarter last year.

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